The Connecticut Foundation Solutions Indemnity Company (CFSIC), the non-profit captive set up to distribute remediation funds to assist homeowners by the ‘crumbling foundations’ issue, will launch on at 9am EST on 10 January.
The original launch, scheduled for 15 December 2018, was postponed due to the high volume of responses during the 30-day public comment period.
The ‘crumbling foundations’ issue was caused by concrete of a stone aggregate mined from a quarry containing pyrrhotite, which has resulted in cracks forming decades after the foundation was constructed.
Resolving the issue is a very complex task that can require lifting a house off its foundations, knocking the foundation down and then replacing it, reattaching all the utilities and lowering the house back onto the foundations.
Fixing the cracks: a breakdown of the crumbling foundations captive solution
It has been suggested that worst-case scenario could see some 30,000 homes impacted and that if the captive is allowed to stay in existence between $1.2 billion and $2 billion may be required in paid losses in order to aid all the affected homeowners.
The captive will administer the Crumbling Foundations Assistance Fund, which was set up to distribute the remediation funds to homeowners across the state, with $100 million available in annual $20 million installments over the next five years.
Additionally, a surcharge has been added to residential homeowner insurance policies in Connecticut, effective January 2019, to provide extra funding to the captive.
Once CFSIC has launched, impacted homeowners will be able to submit applications through the third party administration firm ESIS Proclaim.
Claims are x between Type 1 and Type 2, and all Type 1 claims are assigned a severity class code of 3, 2, or 1.
CFSIC expects to initially receive between 400 and 700 applications.
Steve Werbner, CFSIC president, said a “smooth launch” is expected, however, he noted that the company was “realistic enough to understand that there may be some bumps in the road, particularly with what we expect will be a sizable volume of applications from many affected homeowners”.
In a statement on the CFSIC website, Werbner asked homeowners for “patience and understanding”.
He added: “The first few days after launch will be challenging, but we are all committed to receiving applications, logging them in, assigning claim numbers, and beginning the process of bringing relief to affected homeowners.”
“It’s been a long journey, and of course the journey isn’t over, but as we start the process of helping affected homeowners with the crumbling foundations natural disaster, I wish everyone a healthy and happy New Year, and best of luck with the application process.”
