Connecticut Legislators Taking Steps To Help Homeowners With Failing Foundations

Connecticut legislators from the districts heavily affected by crumbling foundations are pushing a legislative agenda that will further assist homeowners struggling with the problem.

Legislators are hoping to pass legislation that will extend the close date for the captive insurance agency dedicated to reimbursing homeowners with crumbling foundations, implementing quarry standards and possibly mandating that insurance companies cover the problem.

As of Monday, 104 homeowners have benefited from foundation repairs through the Connecticut Foundation Solutions Indemnity Company, a captive insurance agency formed in 2017 to help homeowners fix their crumbling foundations. Lawmakers are looking to further protect and provide for more affected homeowners.

“While people have benefited from the policies and commitment from the state, we remain one family, and we must remain active and vigilant to help all the families who haven’t been helped yet,” state Sen. Saud Anwar, D-South Windsor, said.

Anwar, one of four chairs on the crumbling foundations caucus with state Sen. Dan Champagne, R-Vernon and state Reps. Tom Delnicki, R-South Windsor, and Pat Wilson Pheanious, D-Tolland, said the four legislators are working on various bills they want to see passed when the legislative session opens Feb. 5.

“None of these are finalized,” Pheanious said. “But I am very pleased that the members of the concrete caucus and the co-chairs that have been appointed will be supporting it as a group. It’s not a partisan problem. It’s a devastating problem.”

Keeping the captive insurance open

Chief among the caucus’s priorities is extending CFSIC’s close date so that home repairs can continue in the future.

When the legislature created CFSIC nearly three years ago, the legislation included a sunset date of June 2022.

“Clearly, it is going to be important to continue the work of that organization,” Pheanious said. “We don’t want to end that.”

Michael Maglaras, the superintendent of CFSIC, said the captive supports extending the date because it would allow them to continue fixing homes. The captive insurance fund is funded by a $12 surcharge on insurance policies and state bond funding.

“CFSIC’s board of directors is very keen on the June 30, 2022, sunset date being moved forward,” he said. “If the date is not moved forward, we can’t take advantage of additional years of the healthy homes fund surcharge.”

Maglaras said a firm stop in June 2022 would destroy CFSIC’s momentum and make it impossible for the agency to oversee foundation repairs.

“Success breeds success,” he said. “We’ve been exceptionally successful in getting 104 families back in their homes. If that sunset date gets moved, we have a better chance of staying alive. If that sunset date doesn’t get moved, here’s what happens: I end operations on June 30, 2022. No more applications, no more funding.”

Implementing quarry standards

A working group established by the legislature last year to develop a quality control plan for quarries, released a report on Jan. 17 that recommended quarries complete geological source reports and test their aggregate for the existence of pyrrhotite.

Pyrrhotite is a mineral that breaks down when exposed to oxygen and water and is believed to be largely responsible for the collapse of foundations across northeastern and north central Connecticut. An estimated 5,000 to 8,000 homes in Connecticut could be affected.

“There’s going to be a bill that will actually implement their recommendations,” Delnicki said.

Anwar said: “We want to legislate the recommendations of the quarry working group. ... Once we do that, we can make sure in the future that the dangerous sulfites in the quarry materials cannot cause the harm we have already seen.”

The report recommends that quarries complete a geological source report that documents the characteristics of the aggregate, mining, processing, storage and quality control methods used. It also recommends that the legislature mandate testing of aggregate to identify the presence of pyrrhotite and measure the total sulfur content.

The report suggests that if the aggregate contains less than 0.1 percent of sulfur, it can be approved for use for four years. But if the aggregate has a total sulfur content of more than 1 percent, the aggregate will be banned from use.

A 2018 report from the U.S. Army Corps of Engineers also recommended that the state set guidelines for how much pyrrhotite can be used in concrete aggregate mix for residential and commercial buildings. The Army Corps report said less than 0.1 percent pyrrhotite in the concrete is the safest amount. A higher percentage in the mix can lead to the cracking and subsequent structural failure.

Peril of collapse

Delnicki said he was also looking at introducing a bill that would mandate insurance company’s to cover the peril of collapse.

Insurance companies have denied homeowners claims to cover the cost of foundation repairs, leaving homeowners to foot the bill. The repairs can cost anywhere between $150,000 to over $300,000. CFSIC estimates that between 5,000 and 8,000 homes might be affected.

The legislature has tried to pass bills each year that would mandate insurers to cover the problem, but each year the bills fail to advance. Last year, in a devastating blow to homeowners, the state supreme court ruled that homeowner’s insurance policies can exclude crumbling foundations under the existing definition of collapse.

“We put this in every year, but this year is a little different,” Delnicki said. “The insurance industry says they don’t know how to deal with it because they don’t know how many homes or how long the problem is going to last.”

With data from CFSIC on how many homes are affected and how long it will take to remediate the problem, Delnicki said the insurance industry could begin to analyze how to cover the problem.

The Insurance Association of Connecticut has opposed attempts by the legislature to mandate coverage for peril of collapse, but declined to comment on specific legislation before the session begins.

“While we will be working with the legislature on this and other issues in the upcoming session, it would be premature for us to comment on legislation that has not yet been drafted,” Eric George, president of the Insurance Association of Connecticut, said in a statement.

Other bills on the horizon

Homeowners might see legislation that allows for them to suspend their mortgage payments while their home is being repaired.

“We’re looking at forbearance for homeowners with crumbling foundations,” Delnicki said. “To me, it’s very simple and very straight forward. It gives people the opportunity to utilize that money to find somewhere to stay while their home is being fixed.”

Delnicki said he also plans to pursue a bill that would mandate insurers to decide on a homeowner’s claims within 90 days. In order to be eligible for CFSIC funding, homeowners need proof their claims are being denied, but some homeowners, Delnicki said, are waiting six months to a year to hear back from their insurance companies, delaying repairs.

Anwar said other legislative priorities include securing more bond funding for home repairs and extending the life of the tax assessment reduction legislation that allows homeowners to obtain a reduction in their property’s assessment and lower their tax bills.

“We also feel that it is important for us to expect more funding by bonding from the state to continue the work that is going on,” Anwar said.

Kathleen McWilliams can be reached at [email protected].

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