STAFFORD — Insurance companies are stalling when responding to claims from homeowners with crumbling foundations, preventing residents from gaining access to grants from the captive insurance company, according to company Superintendent Michael Maglaras.
The revelation was made during a meeting Tuesday at the Senior Center, which included affected homeowners, Maglaras, state legislators, and the commissioner of the Insurance Department.
The Connecticut Foundation Solutions Indemnity Co. has millions of dollars set aside for those with inactive claims — claims that have been put on hold until required information, including being denied insurance coverage, has been submitted.
In total, 41 percent, representing about $9.5 million, of inactive claims are due to homeowners having yet to receive a response from their insurance companies regarding whether their homeowner insurance claim is denied or accepted.
Additionally, another 33 percent, worth $7.5 million in grants, remains inactive while homeowners wait for the outcome of litigation.
All told, 74 percent of all inactive claimants are waiting on insurance companies before being eligible for relief from the captive.
One Tolland woman said she’s been waiting since February for a denial letter from her insurance company, which is preventing her from having her home fixed.
Gerard O’Sullivan, director of consumer affairs for the Connecticut Insurance Department, said that anyone with similar issues should contact him.
He said that insurance companies are required to respond to claims in a timely manner, but the department will take each situation on a case-by-case basis to determine if there is a pattern with a particular company.
“The department will protect these people the best that we can,” O’Sullivan said.
Although the legislature’s 21-member bipartisan crumbling foundation caucus requested that the Gov. Ned Lamont administration investigate a potential Connecticut Unfair Insurance Practices Act, or CUIPA, violation, it does not appear one will be forthcoming.
Insurance Department Commissioner Andrew N. Mais said the requirements to initiate a CUIPA investigation are rigorous, and federal and state court results in recent years tend to favor insurance companies.
While he said he has yet to make a final decision, “it is going to be a difficult case to prove,” Mais said.
His preference, he said, is to continue working with insurance companies to see if they will voluntarily contribute to relief efforts.
“I would rather have cold hard cash that can help people than a CUIPA investigation that ends up going nowhere and actually lets the insurers off the hook,” Mais said.
Insurance companies also have tried to cut deals with the captive insurance company, picking up a portion of repair costs, while the captive covers the rest, Maglaras said.
He said he never would make such a deal with taxpayer dollars, adding that insurance companies should be doing more on their own to help people repair foundations.
Coming from Fairfield County, Mais said he didn’t initially know much about the crumbling foundation crisis when taking the agency’s lead, but was quickly informed by his staff, who told him it was a top priority in the state, he said.
“This is a state issue, and we as a state are here with you,” he said.
Additionally, the Connecticut Bankers Association is working with four banks to establish a low-interest loan program approved by legislators last session that will provide loans for repairs other than for foundations, such as decks, driveways, and landscaping, which may be damaged or destroyed during foundation replacement, Maglaras said.
Although some people have been critical on social media, Maglaras was greeted by the large crowd with applause before he discussed the captive’s successes, including getting homes’ full values back on their municipal tax rolls, better determining the scope of the problem, and creating jobs through millions of dollars of contractor agreements.
He noted that the cost of replacing a foundation has dropped by tens of thousands of dollars due to competition among contractors.
The next goal, Maglaras said, is to try to convince state or federal officials to come up with another $100 million to keep the captive viable for future repairs that are likely to come in a second wave as more foundations begin to show signs of deterioration.
