Does Homeowners Insurance Cover Stucco Damage?

Stucco offers both cosmetic and functional value as a thin layer of cement mixture on the exterior of your home. It’s especially useful in warm states, like Florida and Texas, where it can keep homes cool in the summer. It’s also fire-resistant, which is good for frame houses, and it may be more cost-efficient than brick or vinyl siding.

Stucco issues with homeowners insurance started to arise in the 1990s. People began uncovering serious structural issues with their homes as a result of stucco damage.

Around the same time, the development and proliferation of exterior insulation and finish systems (EIFS), also known as synthetic stucco, began. Even though EIFS is supposed to be a more modern and improved take on traditional stucco, issues with homeowners insurance haven’t subsided. EIFS is lighter and more flexible than traditional stucco, but it doesn’t mean it’s problem-free.

The issues stucco may cause can necessitate costly repairs. As the main form of protection for your home, you may be rightly wondering whether your homeowners insurance will cover stucco damage.

So, let’s dive into everything you need to know about stucco and homeowners insurance, including common signs of stucco damage and when your homeowners insurance will cover stucco damage.

The main problem with stucco is its possibility to harbor water, which can lead to water damage. It isn’t an issue when water gets inside the stucco; the problem occurs when it can’t get out. Old stucco that has cracks or tears, or stucco that was improperly applied initially to the exterior of your house, can retain water, which can lead to serious structural problems. Signs of stucco damage can manifest on the inside and outside of your home.

On the exterior of your house, you may notice cracks or bubbles in the stucco. You might see stains, too, where water has left a visible mark. Streaks around openings, like doors and windows, may also be a sign of stucco water damage that may be an insurance red flag. Excessive moisture might be visible to the naked eye, too. For instance, you may spot elevated or damp spots on a wall.

You could also experience issues around the doors and windows inside your home, like warped or rotted trim, or even leaks. If the issue is bad enough, floors and carpets could become wet, or the humidity in your home could noticeably increase and damage some personal property in your house.

Mold or dry rot may also result from serious stucco-related water damage. If moisture was trapped in the stucco when it was coated onto your house, the frame could be rotting from the inside out. In addition to water, cracks or holes in the stucco may also make it easier for pests to get into your home.

Homeowners insurance may cover stucco damage or the damage that stucco has caused to your home if you identify it promptly and report it to your insurer as soon as possible. Often, though, stucco damage isn’t so cut and dry.

Unfortunately, the nature of stucco damage means it usually isn’t noticeable until it has accumulated over time. It may take a lot of water to build up before any troubles start to arise. But, by then, it may already be too late.

Home insurance companies tend not to cover water damage if it’s gradual or occurs over time. They believe that it’s the policyholder’s responsibility to maintain their home. If you’ve allowed water damage to build up, an insurer may contend that the initial damage may be covered, but the water that has permeated or persisted has caused additional damage that the company isn’t liable for. Thus, water damage isn’t always an easy fix.

For instance, when it comes to water problems, a home insurance provider may be more willing to cover a sudden burst pipe reported immediately rather than a stucco issue that has been slowly deteriorating a home over months. 

While some protection for water damages should be in your policy, mold damage may be excluded from your insurance altogether. Insurers are tentative about dealing with mold because it may be indicative of underlying conditions that have persisted for some time, which could be true as it relates to stucco damage.

But, if mold ruined some of your personal property, like your clothes in your closet, your insurer may reimburse you for that. Double-check your policy, or ask your provider about mold coverage.

Improperly applied stucco can tear more easily. Something that may help your chances of your stucco damage being covered is a guarantee that the job was done by a professional. Home insurers typically don’t cover faulty workmanship, but the liability may fall on the contractor or builder. 

As long as they’re licensed and insured, you may be able to seek damages from them. This is why it’s important to seek home improvements from professionals and be careful about all contracts you sign.

Home insurance companies never accept claims for DIY jobs gone bad. If you applied stucco yourself, which is more common for traditional stucco than EIFS, you won’t be covered for problems that may result.

Carriers also don’t cover problems that existed from before you had your home policy in place. For example, if an adjuster finds that the stucco tears you filed a claim for have existed for at least three years, and you’ve only had your policy for one year, you won’t be covered.

Furthermore, you won’t be covered if stucco tears were caused by the land under your home shifting. Stucco can tear as a result of an earthquake or even gradual erosion. Unfortunately, earth movements are almost always excluded from homeowners policies. 

Due to the issues they can cause, some carriers refuse to cover homes with EIFS. Or, you may only be covered if you have drainable EIFS, an improved form of EIFS coating compared to the initial product used regularly before the 2000s. Drainable EIFS may offer improved impact resistance in addition to better water drainage, and some insurers may take this into account.

If you’re buying a stucco home, you may want to see if a home inspector can include a moisture test in their home inspection. You may need a specially trained EIFS inspector to come out, and their results could be crucial in obtaining home insurance with EIFS stucco. Their work will allow you to find any moisture buildup behind the walls, and you can find out how to fix it.