The Hartford and Liberty Mutual Insurance have agreed to provide supplemental financial assistance to current and former policyholders receiving assistance in remediating their crumbling foundations from the state’s non-profit captive, the Connecticut Foundation Solutions Indemnity Company (CFSIC).
CFSIC was set up to remediate homeowners impacted by the ‘crumbling foundations’ issue, cracks forming in foundations caused by concrete of a stone aggregate mined from a quarry containing pyrrhotite.
Commercial insurers generally refused to cover the issue, but on 8 January the Hartford and Liberty Mutual entered into memoranda of understanding to provide supplemental financial assistance to policyholders.
Under its agreement, The Hartford will establish and administer The Hartford Benefit Programme and commit $3.5 million to the programme.
Under its separate agreement, Liberty Mutual will establish and administer the Liberty Benefit Programme and commit $7 million to the programme.
Another commercial insurer, Travelers entered into a similar memorandum of understanding in December last year, pledging $5 million.
Homeowners in Connecticut who have been impacted by the ‘crumbling foundations’ issue will be eligible for the supplement, providing they are current or previous policyholders with the companies and opted to participate in the assistance programme launching through CFSIC.
Participation in the programmes will be voluntary, meaning supplementary assistance will be available to qualifying homeowners but is not required for homeowners to receive general assistance through CFSIC.
A spokesperson from The Hartford, Michelle Loxton, said despite most homeowner policies not covering the damages the company recognises the highly unusual nature of the issue and the impact it is having on Connecticut families and therefore felt providing the funding was the right thing to do.
Jim MacPhee, president and COO of Liberty Mutual Global Retail Markets (US), applauded the state for establishing the remediation fund and added: “We believe it’s the right thing for us to provide additional assistance to our customers who would have no other avenue for relief if their repair costs exceed their CFSIC benefit.”
Governor Dannel Malloy said the commitments from the insurers represented significant progress for affected homeowners.
Malloy added: “I applaud both companies for stepping up.”
Attorney General George Jepsen joined Malloy in commending the companies in becoming part of the solution to the 'crumbling foundations' problem.
Jepson said: “These funds will help many homeowners to bridge the gap between their CFSIC benefit and the cost of replacing their home’s foundation.”
“This is an important commitment made by these two companies today, and I’m hopeful that additional insurers will join them to help address this potentially catastrophic situation.”
Department of Consumer Protection commissioner Michelle Seagull commented: “We’re pleased to see more companies joining this effort to give these homeowners some relief.”
“There’s no one solution to this terrible situation, and we’re pleased whenever more resources become available. We’re committed to continuing to work with our partners and sister agencies to support homeowners in their time of need.”
Michael Maglaras, CFSIC superintendent, stated: “With the addition of The Hartford and Liberty Mutual as our new collaborators, we’re going to be able to greatly expand the help we can give homeowners.”
