As a way to get started and to learn more, not only about the CFSIC program but also about how you can apply if you believe you have a crumbling foundations claim, please take a look at these “Frequently Asked Questions.”
No. CFSIC does not operate exactly like a traditional insurer. It will not be collecting premiums from homeowners before honoring eligible crumbling foundations claims.
CFSIC is licensed in the state of Connecticut as a captive insurer. It has been organized under Connecticut’s captive statutes, enabling it to serve a limited purpose, which is assisting with the crumbling foundations natural disaster. CFSIC is not a commercial insurance company. It does not sell insurance to the public or otherwise conduct its business for any other purpose except addressing the crumbling foundations issue. Learn more about what a captive is.
Nine volunteer members, who applied to become members of the board. The enabling legislation under which CFSIC was formed determined the number of directors, and also determined the experience categories under which directors were to be appointed. There are also four ex-officio board members, who have been appointed by representatives of Connecticut state government. These ex-officio board members are non-voting.
CFSIC is authorized by statute to operate through its fiscal year ending June 30, 2022.
Our view is that CFSIC’s job will not be done by June 30, 2022. All evidence points to a crumbling foundations natural disaster that will take a number of years beyond 2022 to fully address. The citizens of the state of Connecticut, through their elected representatives, will ultimately decide if CFSIC’s lifespan should be continued beyond June 30, 2022.
From an annual allotment, supplied to CFSIC by the Crumbling Foundations Assistance Fund, which is warehoused within the Connecticut Department of Housing, which in turn is funded by the Connecticut State Bond Commission, and which is $20 million each year beginning in the state fiscal year ending June 30, 2018. CFSIC also expects to receive funds of approximately $8.5 million annually, beginning at some point after February of 2019 from the surcharge being placed on homeowners’ insurance policies issued in the state of Connecticut. CFSIC’s current five-year operating pro forma financial shows expected revenues of approximately $137.5 million, but these revenues only become available to CFSIC if the projected annual allotments noted above are made available to CFSIC in a timely way, according to the enabling legislation. Delays at any point in the receipt of funds by CFSIC, including administrative delays, may cause CFSIC to stop accepting applications until funds are available in CFSIC’s account to pay claims.
Yes. CFSIC will not accept applications beyond the point, in any fiscal year, at which it does not have current and projected funds to pay accumulated valid claims. We believe it is important that claims be adjusted honestly and fairly, and that CFSIC be transparent with the public about its available resources and the degree to which those resources are, at any point in time, adequate or inadequate to fulfill our mandate. Any delays or reductions in planned funds availability for CFSIC, at any step of the process, may cause CFSIC to temporarily or permanently stop accepting new applications for coverage. This includes delays in actually receiving funds that have been allotted, that, because of administrative delays that occur along the way, are not received by CFSIC in a timely manner and therefore cannot be counted as revenue.
It is reasonable to assume that, once CFSIC is operational, paying claims, and fulfilling its mission, other sources of revenue may become available as a result of CFSIC’s leadership on the crumbling foundations issue. The crumbling foundations problem is immense. It will not be remedied through CFSIC’s known resources alone. While several other potential sources of revenue have been discussed beyond the state allotment and the homeowners’ policy surcharge, at the current time none of these potential sources have been contractually committed to CFSIC, and therefore cannot be counted as real or potential revenue for purposes of our mission fulfillment.
No. Almost all captive insurance companies outsource operational functions to independent professional service providers under contract. This is also the case with CFSIC.
Yes, it will be the case with respect to the two sources of legislatively confirmed revenue, of which CFSIC is aware. To the extent additional sources of revenue become available and more homeowners can be served, it is CFSIC’s intention not to exceed a total of 10% of all revenues. It’s clear that CFSIC’s expenses will be higher than expected in the first fiscal year, because of the need to assign a uniform severity class coding to existing visual examinations on a one-time basis. CFSIC will endeavor to recover this one-time expense from funds that are now available and being held, for the purpose of testing, at the Connecticut Department of Housing.
No, unless by invitation. CFSIC’s board meetings will not be open to the public.
No. It is an independent insurance company set up to assist the state of Connecticut with helping claimants who are suffering from the crumbling foundations natural disaster, but it is not a branch of state government or a state agency.
CFSIC will be under the direct supervision of its Board of Directors and of the Connecticut Insurance Department. It will also undergo an annual audit, conducted by an independent auditor, of its financial condition and its operations. That audit will be posted on this website.
There will be two. The first will be a “Type 1” claim, which is a claim for assistance with the replacement of an affected residential building foundation. The second will be a “Type 2” claim, which will be a claim filed by someone who has already replaced an eligible residential building foundation and is seeking reimbursement. Learn more.
For Type 1 claims, we will require the engineer performing the visual inspection or the CFSIC-certified home inspector, to apply a severity class code of 1, 2, or 3. Those with the most severe and quantifiable deterioration (carrying severity class code of 3) will be in line first for adjustment and payment as Type 1 claims. You can learn more about the severity index here.
For Type 2 claims that are eligible for payment, we have set up a “first come, first served” process, but subject to a fiscal year quota on the number of claims we will process. That number for the fiscal year ending June 30, 2019 will be 25 paid claims. The Board of CFSIC has committed to paying up to and including 100 Type 2 claims by the end of CFSIC’s currently-mandated lifespan, which is June 30, 2022.
If you are in possession of an older visual examination performed by a licensed professional engineer, where no CFSIC severity class code has been assigned, you can: (i) go back to that engineer and ask for a severity code to be assigned, (ii) go to a new engineer (for example on CRCOG’s list) and have a new examination, or (iii) ask a CFSIC-certified home inspector to provide you with a severity class coded visual examination.
You can. You would complete a Type 2 application in its entirety, submitting all points of evidence. CFSIC will consider your claim. If your claim is approved, CFSIC will pay for concrete work done according to our guidelines. If you decide later to apply for a full Type 1 replacement or Type 2 reimbursement, you will have to apply again as if applying from the beginning, and if your claim is a valid claim and is paid, CFSIC will deduct the value of the partial claim that has already been paid on your foundation. You will not be able to apply for more than one partial Type 2 claim. In other words, you can only submit a partial claim to CFSIC once.
No. If you have a valid claim with a completed application, have supplied all points of evidence, and you are otherwise eligible according to the guidelines, you stay on the list of eligible Type 2 claimants, moving up in order, until your claim is adjusted or CFSIC ceases operations, whichever occurs first.
Yes. CFSIC’s mission is to help affected homeowners restore their homes in as an efficient way as possible. The idea is to help homeowners pay for appropriate concrete work aimed at the replacement of the foundation itself. (View a list of what is covered for a CFSIC claim and what is not.)
Yes. CFSIC will employ a linear foot/square foot cost factor to first determine the maximum applicable costs we will pay for or reimburse. (You can find those factors here.) A payment made by CFSIC for a Type 1 claim, inclusive of the linear foot/square foot cost factor, will in turn be subject to a maximum of $175,000 of total payment by CFSIC for the residential building in question, at all times subject to all other terms and conditions of the guidelines.
The formula for reimbursement will work the same way, and the cap will be the same (with the exception of Legacy Claimants). Type 2 claims, once approved, will be paid out in four quarterly installments.
The formula CFSIC is employing is designed to assist with the replacement of a foundation, and to assist with a Type 2 claim to reimburse the replacement of a foundation. CFSIC cannot cover 100% of those costs (or any of the costs of amenities) or it will be unable, with its finite resources, to help as many homeowners as possible, given all the evidence of the extent of the crumbling foundations natural disaster, and the limited financial resources available to CFSIC.
While the Board of CFSIC is very committed to raising awareness about the need for additional funds for CFSIC... including an additional round of funding from the Connecticut Bond Commission, potential funding from one or more sources within the federal government, and, lastly, potential assistance from the commercial insurance market...none of this is certain. It is not in CFSIC’s interest to make assumptions about additional funding unless the evidence is clear that that funding will be made available through a contractual commitment to CFSIC. It is the Board of CFSIC’s belief that, once CFSIC is launched, and it is efficiently and fairly adjusting and paying eligible claims, other sources of revenue may become available; however, it would be unfair and unbusinesslike for CFSIC to commit to foundation replacements or reimbursements beyond the finite resources that have been committed to us.
CFSIC is in active discussions with CHFA, the Connecticut banking community, and others in understanding how CFSIC will be able to direct homeowners to sources of financing for any gap occurring between the total amount CFSIC will pay for any foundation replacement and the total cost of that replacement, through the Collapsing Foundations Credit Enhancements Program. This program will not be part of CFSIC’s underwriting program. We hope to learn more soon about the structure and launch of the credit enhancements program, so that we can begin to direct homeowner applicants to additional potential sources of funding.
For Type 1 claims, it will be the selected contractor (with the exception of any payment made by a collaborating insurer, which will be made directly to the claimant). For Type 2 claims, it will be paid directly to the claimant.
You should not. First, incomplete applications, while registered in CFSIC’s system, move into “inactive claim” status. Our best advice is not to submit an application unless you can submit a complete one with all required points of evidence. A complete application, attaching all points of evidence for an eligible claim, and where the visual test includes a severity grading, can move reasonably quickly to resolution.
That choice is yours, but we do not recommend it. Those homeowners who believe that they have valid claims may decide to quickly submit completed applications with all points of evidence. This will be the case even though they understand that the commencement of replacement work may take much longer than expected, given current circumstances. It is advisable, if you believe you have a valid claim, and you can complete an application and provide all required points of evidence, to do so sooner rather than later.
You can learn more about that by going to the Capitol Region Council of Governments (“CRCOG”) website. You can learn more about the visual inspection program involving CFSIC-certified home inspectors by going here. (The home inspector program is not eligible for reimbursement by CRCOG.)
CFSIC will accept a visual examination report conducted by a Connecticut-licensed professional engineer not on CRCOG’s list, including a visual examination report conducted by a CFSIC-certified home inspector. It will also accept a core sample analysis performed by a laboratory not on CRCOG’s list. However, with regard to building contractors, you can only engage a contractor that appears on CRCOG’s list of qualified vendors...unless that vendor has been disqualified by CFSIC.
They do... at:
82 Hopmeadow Street
Simsbury, CT 06089
By completing the applicable application electronically and attaching all applicable points of evidence. The completion of applications electronically assures a timely and efficient response to homeowners.
You can. It can be processed by mailing the application to the ESIS office address shown in the answer to Question 42 above.
Your first recourse is to speak with an ESIS-ProClaim representative. If you believe that your claim has not been treated fairly according to the established claim guidelines, you may ask the Board of Directors of CFSIC to consider your individual case within thirty days from the date on which CFSIC informs you of its decision about your claim. The decision of the Board of Directors of CFSIC on any claim matter is final.
No. Any documented evidence of pyrrhotite in the coarse aggregate, as indicated in the core sample or other approved type of analysis, is all that is required.
Yes. You would undertake a new visual examination conducted by a licensed professional engineer. If that exam reveals that your severity had migrated from a severity Class 1 to a 2...or a Class 2 to a 3...CFSIC will accept the new severity class code.
No. Your claim status in the CFSIC program and the amount of the CFSIC claim payment for which you qualify will not be affected in any way by participation in any of the insurer benefit programs.