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Emergency Fund Covers Damages Foundation Leak

We had to have a portion of the sewer line under our house replaced and decided we would freshen up our basement by removing brick wall at one end of the room and replacing the carpet. It was an excellent opportunity to utilize the Home Renovation Tax Credit [1].

Since we had not really used that end of the room, we didn’t notice that the floor was soaking wet. After removing the brick we found that one of the prior owners had installed a wood burning fireplace. They had cut open a hole in the foundation and built the hearth and chimney. Problem was the hearth was not sealed properly and it looks like the chimney was installed over the old drain tile and causing a build-up of water on one side of the foundation.

With nowhere to go, the water came into the basement.

What Did Insurance Cover?

I called my insurance company and they explained that the water damage to the inside of the house was fully covered but that the damaged foundation was not. On the one hand I am glad that the water damage will be covered, but am going to be spending a lot of money to get the foundation fixed.

Apparently, there are only two property insurance companies in Canada that cover seepage and TD Meloche Monnex (Security International) is one of them!

Lessons Learned

1. Our emergency fund [2] is covering the damage and while I’m upset about spending the money, I have it available. The only problem is that I may not have enough if another emergency were to arise (like the roof!).

2. It’s possible to seal the foundation from inside the house. Each method has its trade-offs but one way or another, its going to cost a whole lot of money.

3. Finding a contractor is not that easy. Despite the recession, many are too busy to return phone calls. Good for the economy, bad for me.