HARTFORD, CT — The House approved a bill Saturday that would add a $12 surcharge to every homeowner insurance policy in the state to help homeowners with crumbling foundations in about 40 towns on north central Connecticut and sinking homes in New Haven.
The amended bill passed 97-42 after personal testimony from one lawmaker who owns a home with a crumbling foundation.
The surcharge is expected to raise anywhere between $9 to $10 million a year through December 2029 and would be deposited in a Healthy Homes fund. An estimated 85 percent would be dedicated to the homeowners with crumbling foundations. The money would be transferred to the captive insurance fund which controls and distributes the funds to homeowners.
Funding of not more than $1 million would be remitted to the Department of Economic and Community Development for homeowners with homes near the West River in the Westville section of New Haven and Woodbridge with structural damage that was caused from water infiltration.
The crumbling foundation problem is thought to be caused by a chemical called pyrrhotite that was found in a quarry that has since been closed. More than 635 homeowners have reported the problem to the Department of Consumer Protection, but the problem is thought to be much bigger and some say it could impact as many as 30,000 homes.
Homeowners have been hesitant to come forward because the problem could mean their home is worthless and many don’t have the $150,000 to $200,000 it would take to replace the foundation. Repairing it is not an option.
Rep. Kelly Juleson-Scopino, D-Manchester, said she’s been very hesitant to speak publicly about the issue because she lives in a home with a crumbling foundation.
“But please make no mistake this story is not about me,” Juleson-Scopino said. “And that is exactly why I’ve been hesitant to speak about this issue.”
She said she never wanted it to seem self-serving and take the attention away from the hundreds and thousands in eastern Connecticut who are also experiencing this problem.
She said she purchased in 2012 for about $300,000 and at the time they did everything right. They had a home inspection and went back to the homeowners to ask for additional repairs before closing on the home.
“It was meant to be a home that was filled with hopes and dreams for the future and now those dreams are broken quite literally,” Juleson-Scopino said.
She said in addition to the $100,000 of repairs she needs to make, she still has a massive mortgage “and there is no way to get out.”
She said her home which was valued at $300,000 when she purchased it is now worth $86,000.
“This isn’t a problem. This is a crisis,” Rep. Kurt Vail, R-Stafford Springs, said.
Vail said it amounts to a $1 per month surcharge.
“I have a responsibility to come up here and do what’s right for everybody,” Vail said.
Rep. Tim Ackert, R-Coventry, said he was recently stopped by someone who begged him not to increase the cost of an insurance policy to deal with this problem. He said they are going to pay for it in their property tax increases if they live in a town with a lot of these homes experiencing this problem because the grand list is going to drop as more people learn their home is impacted.
Rep. Cathy Abercrombie, D-Meriden, said this issue doesn’t impact her community “but we’re a small state.”
“We should be supporting each other. What is happening to these families is devastating,” Abercrombie said.
She said the federal government should be helping, but they’re not.
Gov. Dannel P. Malloy has applied to the Federal Emergency Management Agency for help declaring it a natural disaster.
Last year, FEMA toured the eastern portion of the state to inspect crumbling foundations.
The state has been trying to make a case to the federal government that the problem deserves federal disaster relief funding, but the federal government has so far denied their request.
The legislation the House passed Saturday now heads to the Senate.
While the insurance industry has objected to legislation that increases costs throughout the session, it said the legislation passed Saturday was better than previous versions.
“Although we oppose measures that increase costs, the proposal that passed the House is far less damaging to Connecticut consumers than other bills that have been proposed on this issue,” Eric George, president of the Insurance Association of Connecticut said after the vote.