The new entity charged with overseeing the distribution of state funds to help Connecticut homeowners with crumbling foundations has finally received a long-awaited $19 million.
Michael Maglaras, superintendent of the Connecticut Foundation Solutions Indemnity Company, told The Associated Press on Friday that the money was deposited Thursday. He said the captive insurance company was now “poised to be operational as a result,” noting the entity was “very much in danger of having to suspend our operations.”
Maglaras said applications from affected homeowners will now be accepted in early January. He said new underwriting and claims management guidelines, modified after taking into account hundreds of public comments, will be posted online, beginning Dec. 4-10. While he didn’t elaborate on what those changes include, Maglaras said they’re “very significant” and designed to make the payments more equitable. He urged residents to keep a close eye on the www.crumblingfoundations.org website. The insurance company will officially be launched and accepting applications 30 days later.
“We are very much moving ahead with our intended plan,” he said.
Release of the bond funds had been delayed due to long-running negotiations with the state’s Department of Housing, which Maglaras described at a recent meeting with state legislators as “onerous” and “expensive.” He said Friday that various state officials ultimately worked together to get the money released. Nearly $1 million had been previously released.
The captive insurance company had hoped to receive $20 million more in state bonding this year, but the Dec. 7 meeting of the State Bond Commission was canceled. It will now be up to Democratic Gov.-elect Ned Lamont, who will oversee the commission, to decide when that second batch of money will be released. He takes office in January.
State lawmakers created the insurance company to oversee the distribution of $100 million in bonding – $20 million a year for five years – as well as the estimated $8.5 million to $9 million in annual proceeds from a new $12 annual surcharge on Connecticut homeowners’ insurance policies. That surcharge is supposed to last 10 years.
Maglaras previously told The Associated Press that he expects at least $1 billion is needed to address the problem. He estimated the funds committed so far will only cover the cost of replacing foundations for 650 to 700 homes, considering the average $185,000 cost per home. He believes 5,000 to 9,000 homes with cracked and deteriorating foundations will have to be fixed over the next few years. The problem has been linked to the presence of pyrrhotite, an iron sulfide that has reacted naturally with oxygen and water over the decades.
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