HARTFORD, Conn. (AP) _ Connecticut legislators are looking to help hundreds, if
not thousands, of homeowners whose foundations are crumbling because of an iron
sulfide found in the concrete by creating the state’s own insurance company.

The newly minted state budget includes language establishing a not-for-profit
captive insurance company, run by a volunteer board of directors, to distribute
grants for costly repairs or replacement of deteriorating foundations. It will
be funded with $100 million in state bonds over five years.

Rep. Jeff Currey, a Democrat from East Hartford, said the captive insurance
company will be regulated and licensed to give it “that extra layer of

This will mark the first time the state has created such a captive insurance
company, which is essentially a highly regulated form of self-insurance.

Steven Werbner, Tolland town manager and co-chairman of the Capitol Region
Council of Governments’ crumbling foundations committee, said his group didn’t
recommend the state create its own insurance company to distribute financial
assistance, concerned it might be “a bit too complex.” But they’re taking a
wait-and-see approach to the concept, which could take months to set up.

“We remain open to see how it works,” he said. “But our immediate concern
was to get money into the hands of those who need it as soon as possible.”

An estimated 30,000 or more homes and condominiums built in eastern and central
Connecticut from the mid-1980s to 2016 could have failing foundations because of
the presence of pyrrhotite. It reacts naturally with oxygen and water, causing
concrete to crack and crumble over the decades, making some homes unsellable and
unlivable. In many cases, homeowners have been unable obtain insurance. Repairs
can cost as much as $200,000 to replace a foundation.

It’s unclear exactly how many homes are affected. As of Thursday, the
Department of Consumer Protection had received 636 homeowner complaints. State
officials are hoping that news of this new financial assistance will encourage
more affected homeowners to come forward, potentially giving the state more
ammunition in its bid to persuade federal authorities they need federal

“I’m hoping that by the sheer numbers of this, the federal government will see
that this is truly a natural disaster,” said Sen. Cathy Osten, D-Sprague. She
and Currey both stressed that this $100 million likely will not address the
region’s entire problem, which some estimate has the potential to cost as much
as $5 billion.

The new captive insurance company will eventually create eligibility
requirements and underwriting guidelines for affected homeowners. Grants will
only be released to approved contractors and vendors. While the insurance
company terminates in 2022, it can be extended.

The bill also creates for a separate loan program to help homeowners obtain
lower cost state loans, as well as a new state-funded advocate to guide
homeowners through the various assistance programs.

Considering this problem first came to light in the mid-1990s, Currey said some
homeowners are skeptical about the new legislation. He and Rep. Chris Davis,
R-Ellington, were scheduled to meet with affected homeowners on Saturday in
Ellington to explain the initiative and answer questions.

“There’s a level of caution for all homeowners right now who are affected by
this, because they haven’t seen the movement they’d like to have seen by now,”
Currey said. “That’s now on us, to go out and have conversations.”

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.



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