UPDATES ON THE CRUMBLING FOUNDATION SITUATION IN CONNECTICUT
We previously discussed the issue of crumbling foundations in a blog called Crumbling Foundations in Connecticut back in April, 2018, and this blog explores some updates since the release of that blog.
These crumbling foundation issues are prevalent in northeastern Connecticut and can encompass homes built anytime between the early to mid-1980’s until approximately 2015 and could cost homeowners well in excess of $150,000 to make repairs should their homes be affected, with the most effective repair being the complete replacement of the foundation. As noted in the prior blog, insurers have consistently denied insurance claims on this issue. Recently, a Connecticut Foundation Assistance Fund was formed in order to provide some funding to those homeowners that qualify, for homes built between 1983 and 2015, or homes built prior to 1983 with newer additions built between the applicable time period. The following website indicates that claims can be filed again starting on January 13, 2020: [Click Here]
The Connecticut Supreme Court reviewed the crumbling foundation issue in some recent cases and addressed some of the outstanding issues. Specifically, the Court, in Karas v. Liberty Mutual Ins. Corp., in a decision released on November 12, 2019, considered whether the definition of the term “collapse” pertains to the collapse provisions in the insurance policy issued by the insurance company and, if so, what degree of deterioration constitutes a substantial impairment of the structural integrity of those walls sufficient to trigger coverage. Additionally, the Court considered whether the coverage exclusion in the policy for the collapse of the home’s foundation unambiguously includes the basement walls of the home. . The Court also issued similar rulings in shorter decisions in the matters of Vera v. Liberty Mutual Fire Ins. Co. and Jemiola v. Hartford Casualty Ins. Co., released on the same date.
The Court in Karas concluded that the definition of the term “collapse” applied to the plaintiff’s policy, but also concluded that the “substantial impairment of structural integrity” standard requires proof that the home is in imminent danger of falling down and that the term “foundation” unambiguously encompasses the home’s basement walls. Therefore, a plaintiff must establish that his/her home is in imminent danger of a collapse, which would depend upon the facts and circumstances of each individual case, as well as any expert testimony. The Court “recognize[d] the seriousness of the crumbling foundations problem that confronts the plaintiffs . . . and acknowledge[d] the gravity of the problem for so many other homeowners statewide. Our sole task, however, is to construe the plaintiff’s homeowner’s insurance policy as we would any other such contract, that is, in accordance with its terms as applied to the facts of the case.”
As such, the issues faced by those homeowners with crumbling foundations will unfortunately continue on for now, as insurers are essentially not liable for such claims unless potentially if the home has collapsed or is on the verge of an imminent collapse. In many cases, while a person might be able to show that his/her home will eventually fall down, they can also often live in the home for many years, which contributes to the difficulty of coverage for these claims