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My house has a basement, and on the outside, there's a layer of XPS foam insulation on the outside of the basement wall, up to the grade. For most of the house, the sod goes right up to the house, however on one section it is exposed, and there's a slight gap between the insulation and the house. What's the best way to cover it up?

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For covering exposed XPS, especially on foundations (though not limited to there) "Parging" (pretty much a layer of a stucco-like product) is fairly normal; you can get stuff marketed for exactly this job, or not, as you prefer. In the typical thin application, it provides sun/UV protection and appearance similar to concrete, with a minimal level of impact resistance.

In a more abusive location a full stucco coat with reinforcement may be needed.

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