With the receipt of $19.15 million in state funds, the state-chartered Connecticut Foundation Solutions Indemnity Company could begin processing claims by homeowners with crumbling foundations in early January and cut its first checks in February, the company said Friday.
“That makes us operational,” said Michael Maglaras, the company’s superintendent. Payments could go out by mid-February, “if you’ve got your application in order, all your evidence, if you go out and get your bids.”
CFSIC was established by the General Assembly as a captive insurance company to process claims for relief from owners of homes with concrete foundations contaminated by pyrrhotite, a mineral that expands and causes severe cracking when exposed to groundwater.
The legislature has authorized the borrowing of $100 million over five years, providing the relief effort with annual payments of $20 million. It also authorized a $12 annual surcharge on homeowner’s policies, which is estimated to produce more than $8.5 million a year.
Payments from the relief program are capped at $175,000, while the cost of raising a house and replacing its foundation can cost as much as $250,000. The money provided by the state is only a start on providing relief.
“We have a problem that is at least a billion dollars,” Maglaras said. “It is a serious issue.”
Claims are limited to foundation work and cannot include collateral damage, such as demolishing a deck to get access to a foundation.
“Our job is to get you in a stable house that is not going to fall down,” he said.
Details on how to make a claim are available at CrumblingFoundations.org.