Report from Governor - Agreement with Hartford and Liberty Mutual Insurance
GOV. MALLOY AND ATTORNEY GENERAL JEPSEN ANNOUNCE AGREEMENTS WITH THE HARTFORD AND LIBERTY MUTUAL INSURANCE TO PROVIDE SUPPLEMENTAL ASSISTANCE TO CRUMBLING FOUNDATION HOMEOWNERS
(HARTFORD, CT) – Governor Dannel P. Malloy and Attorney General George Jepsen today announced that the State of Connecticut has entered into two separate memoranda of understanding with The Hartford and Liberty Mutual Insurance to provide supplemental financial assistance to current and former policyholders who file claims and receive awards to remediate their crumbling concrete foundations through the state’s new captive insurance program.
Under its agreement, The Hartford will establish and administer The Hartford Benefit Program and commit $3.5 million to the program. Connecticut homeowners who are current or past policyholders of The Hartford, who are experiencing deterioration of their foundation due to the presence of pyrrhotite in the concrete aggregate, and who have also opted to participate in the assistance program launching through the Connecticut Foundations Solutions Indemnity Company (CFSIC) will be eligible for this supplement.
Under its separate agreement, Liberty Mutual will establish and administer the Liberty Benefit Program and commit $7 million to the program. Connecticut homeowners who are current or past policyholders of Liberty Mutual, who are experiencing deterioration of their foundation due to the presence of pyrrhotite in the concrete aggregate, and who have also opted to participate in the assistance program launching through the CFSIC will be eligible for this supplement.
Homeowner participation in these programs will be voluntary. Supplemental assistance will be available to qualifying homeowners, but is not required for homeowners to receive general assistance through CFSIC.
“The crumbling foundation crisis is a widespread and complex problem that requires all stakeholders to be a part of the solution,” Governor Malloy said. “These commitments from The Hartford and Liberty Mutual represent significant progress for affected homeowners, and I applaud both companies for stepping up. I personally want to thank former Insurance Commissioner Katie Wade for her hard work during her tenure in bringing these carriers to the table to help us work toward a solution.”
“I commend The Hartford and Liberty for coming to the table to be a part of the solution to the crumbling foundations problem,” Attorney General Jepsen 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.”
“I am pleased that The Hartford and Liberty Mutual are making a public commitment to help homeowners repair their foundations and I ask the other insurers and financial institutions to follow this positive example,” Lt. Governor Nancy Wyman said. “Still, many people and families will unfortunately experience financial difficulty saving their homes. I am confident that our state and relevant private industries will continue pulling together to provide the additional support they need.”
“We believe that providing additional funding is the right thing for The Hartford to do for our customers and communities,” The Hartford spokesperson Michelle Loxton said. “While most homeowners policies do not cover these damages, we recognize the highly unusual nature of this issue and the impact it is having on families in Connecticut. The Hartford applauds the ongoing efforts of the state to address the crumbling foundations crisis. We will continue to advocate for a holistic and comprehensive solution to this crisis that appropriately involves both federal and state resources.”
“We continue to empathize with our customers who have been impacted by crumbling foundations due to defective concrete,” Jim MacPhee, president and chief operating officer of Liberty Mutual Global Retail Markets (U.S.), said. “This has been a particularly complex issue and we applaud the State for establishing a fund to assist Connecticut homeowners in this unfortunate situation when the policy does not provide coverage. 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.”
“We’re pleased to see more companies joining this effort to give these homeowners some relief,” Department of Consumer Protection Commissioner Michelle H. Seagull said. “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.”
“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,” CFSIC Superintendent Michael Maglaras said.
The maximum per-home benefit that the benefit programs will pay is $25,000 for current insureds and $10,000 for past insureds; any supplemental benefit is in addition to the benefit paid by CFSIC. CFSIC benefits are expected to be capped at $175,000, while the costs of repairing some homes are likely to exceed that amount. The Hartford and Liberty Benefit programs will help current and past insured to make up the difference between what CFSIC will pay and the remaining costs of fixing the foundations.
Enrollment in CFSIC is required, as is demonstration of current or past policy enrollment with either The Hartford or Liberty Mutual. Pursuant to the agreement, the Connecticut Insurance Department will monitor the companies’ participation and administration of the programs.
Last month, Governor Malloy and Attorney General Jepsen announced the first supplemental benefit program with Hartford-based Travelers last month.
Consumers with related questions can contact the Connecticut Insurance Department at 1-800-203-3447 or the CFSIC by emailing firstname.lastname@example.org.
**Download: Memorandum of agreement with The Hartford
**Download: Memorandum of agreement with Liberty Mutual
For Immediate Release: January 8, 2019
Contact: David Bednarz
Contact: Jaclyn M. Severance
Office of Attorney General George Jepsen