Aug. 10--Members of the Connecticut congressional delegation are urging insurers to join a financial assistance fund that would help homeowners with the cost of replacing their failing foundations.
On Aug. 5, U.S. Sens. Richard Blumenthal and Chris Murphy and U.S. Rep. Joe Courtney sent the letters to 37 insurance companies in the state following a July 12 meeting in Washington with Liberty Mutual Assurance, Allstate Insurance and State Farm. At the meeting, they urged the three insurers -- the most active insurance companies in the area of the state where the foundations are deteriorating -- to join a financial assistance fund created by Attorney General George Jepsen.
In late June, Jepsen announced that four insurance companies, including Travelers and The Hartford, had said they were inclined to join a financial assistance fund for victims of crumbling foundations. Since then, no other insurers have stepped up to join the program.
Jepsen said in June that for the financial assistance program to succeed, "significantly more companies to commit to take part."
In a statement released Tuesday, Jepsen said: "This program obviously offers relief to families and communities, but it is also in the interests of insurance companies to participate. It offers them benefits and protections -- including caps on financial exposure and release from the uncertainties of existing and potential litigation by homeowners who participate, as well as from any claims the Department of Insurance may have for unfair insurance practices."
In their July 12 letters to insurers, the delegation said: "Failure to enact a workable plan to provide relief will have a lasting impact not just on homeowners and communities, but on all those connected to the housing market, including insurers. We hope that your company will be a constructive and collaborative part of making this plan work in order to provide needed relief to your customers, their neighbors, and our communities."
Courtney said the letters were to "follow up very firmly that this proposal that we support is very urgent and that this problem is not getting any better with the passage of time."
"When you have three or four big insurance companies, big players coming forward -- you know these aren't charitable organizations, they are businesses -- but [the companies] see that they have an interest in stabilizing the real estate market in north central Connecticut," Courtney said in an interview Tuesday.
Courtney said the companies at the July 12 meeting were willing to come to the table to discuss solutions. He said he thought insurance companies might be more amenable to joining the fund once UConn researchers release the official results of their concrete testing "because the causation is going to be a thing the insurance industry looks at in terms of risk."
As of Tuesday, 301 homeowners in 18 towns have filed complaints with the state Department of Consumer Protection alleging their concrete foundations are failing. A recent state report said that mineral pyrrhotite, present in the concrete aggregate used for the foundations, was partly to blame.
Insurance companies have denied homeowners with failing foundations claims, saying that the problem does not qualify for coverage under their definition of "collapse," leaving homeowners to bear the burden of a costly foundation replacement on their own. The bill to replace the foundations can cost as much as $200,000.
Insurance Association of Connecticut President Eric George said he had no comment on the letter sent from the delegation.
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