This section is designed to provide realtors with assistance.
To get a good working understanding of how the CFSIC program works, realtors should review the entire “For Homeowners” section of this website, as well as other helpful areas of the site, such as the following FAQs as well as the FAQs shown elsewhere on the site, and the Claims Management and Underwriting Guidelines.
We recognize that realtors may not understand how a complex property insurance claim application process is conducted and how claims are adjusted once they are submitted to CFSIC. We want to help, and we want to make sure that realtors have the information they need.
It’s also important that the many rumors floating around about how CFSIC operates, most of which are inaccurate, are corrected for the benefit of the smoothest possible buyer/seller transaction.
First, here are some commonly asked questions that have been posed by realtors...as well as some answers.
Question: I’ve heard that licensed home inspectors can now provide visual examination reports directly to CFSIC as part of the homeowner claim eligibility process.
Answer: This is true. CFSIC will accept for claim filing purposes a visual examination performed by a CT-licensed professional engineer or a CFSIC-certified home inspector as evidence under a Type 1 or Type 2 application. (For a list of CFSIC-certified home inspectors, click here.)
Homeowners will need to understand that the CT Department of Housing has made it clear that it will not permit reimbursement for foundation examinations to be made to homeowners if the examination is done by a CFSIC-certified licensed home inspector. This means that homeowners using a licensed home inspector will not be able to apply for foundation examination reimbursement costs through CRCOG. Homeowners will therefore have to weigh all the factors in making a decision about whether or not they wish to seek reimbursement under the state-funded reimbursement program.
Question: Where can I find more information about your requirements for a residential building purchased on or after February 1, 2019?
Answer: By clicking here to read Appendix 1 to the Type 1 application (foundation replacement) or clicking here to read Appendix 1 to the Type 2 application (foundation reimbursement).
Question: Why aren’t these two documents the same length?
Answer: Because the type of claim is different, and they are, in each case, an appendix to a specific application type.
Question: Inside these two documents, what’s the most important thing realtors need to know?
Answer: You need to have a working knowledge of both Appendices. They work differently, and have different conditions, again, because of the type of claim application they are attached to. Everything a realtor needs to know about the dates that are critical to the purchase date of the home and potential CFSIC claim eligibility is contained in these two Appendices.
Question: Should I be advising the buyer or the seller on any issue related to CFSIC beyond what is contained in these two Appendices?
Answer: No. Our best advice to realtors is not to insert yourselves in any way into the claim adjustment process, which creates unnecessary legal liability and is also subject to misinterpretation by realtors and homeowners. The facts stated in these two Appendices are what you need to know. You should refer any homeowner questions on the application or the eligibility process to CFSIC’s website, or to CFSIC’s claim adjustment firm, ESIS.
REALTORS NOTE: The two Appendices cited above, the FAQs here and elsewhere on the site, the “For Homeowners” section, and our underwriting guidelines...all found on this site...will answer any question that a realtor has about the CFSIC program.
Question: Why isn’t CFSIC requiring a stated or fixed percentage of pyrrhotite existing in a pyrrhotite test to determine eligibility?
Answer: There are two reasons for this. First, there is no scientific evidence that the existence of reactive pyrrhotite, in any amount, in a core sample, means absolutely and unequivocally that, 100% of the time, the foundation will later fail. Second, we could impose percentage minimums...but all that would do is contribute to an already existing difficult real estate market in the northeast corner of Connecticut. CFSIC’s board is committed to eligibility inclusion wherever possible, not exclusion. The presence of pyrrhotite (in literally any amount) or a visual examination after February 1, 2019 is the first step in the potential multi-step claim eligibility process.
Question: Can a homeowner’s claim with CFSIC be denied because a core sample or other lab analysis doesn’t show enough pyrrhotite?
Question: With regard to the February 1, 2019 date, does it make a difference whether the pyrrhotite test or the visual examination was done by the seller or the buyer?
Answer: No...as long as either the seller or the buyer has done it, and there is a record of it. (However, with regard to the visual examination, CFSIC cannot accept a report for purposes of filing a claim unless it has been severity coded using CFSIC’s severity class code grading.) It’s okay for a seller, for example, to preemptively get either done in order to be ready for a potential buyer.
Question: Is there any kind of time limit on how long the visual examination or the core test undertaken as part of the sale remains valid with regard to the February 1, 2019 requirement?
Answer: There is no time limit on the validity and applicability of the engineer’s written report or the core test with regard to satisfying this requirement.
Question: With regard to the February 1, 2019 date...what if a buyer or seller gets a visual examination conducted by a CT-licensed professional engineer or a CFSIC-certified home inspector, and that engineer’s or home inspector’s report indicates that the foundation in question has no visual deterioration or any sign of impairment due to the presence of pyrrhotite (in other words, a CFSIC severity class code 1). Does that mean that a core test must be conducted immediately after the engineer’s or home inspector’s determination in order for that foundation to be eligible, later, for a CFSIC claim?
Answer: No. In fact, a core test does not have to be done at all in this example, where the visual exam was done and there’s no evidence of any impairment (which means that the foundation is otherwise a CFSIC severity class code 1), until and unless such time as the buyer actually wishes to make a claim to CFSIC. CFSIC does not replace foundations that aren’t impaired; however, there is a way to apply to CFSIC with an unimpaired foundation in place, as is noted further in this Q&A.
Here’s the basic requirement as stated in CFSIC’s Underwriting and Claims Management Guidelines:
“For any residential building purchased on or after February 1, 2019, if the buyer of such residential building is aware that the building or any addition(s) to the building, inclusive of any garage, were constructed in 1983 or subsequent, such buyer will only be eligible to apply to CFSIC as a Type 1 or Type 2 claimant if the buyer or seller of the building has tested for pyrrhotite, or has conducted a visual exam for evidence of pyrrhotite, prior to the date of sale.”
Question: But, can the buyer immediately after the sale or much later apply as a claimant to CFSIC, even though their foundation showed no impairment in the visual exam?
Answer: Yes. The buyer can immediately or later apply as a Type 1, severity class code 1, but only with a visual exam that has been severity graded AND a pyrrhotite-positive core test.
Question: Why would anybody do that if they don’t have an impaired foundation?
Answer: Because they would be in line for active consideration if the foundation later became impaired. There’s a provision in CFSIC’s Underwriting and Claims Management Guidelines that permits a registered severity class code 1 claimant, registered with us as a claimant, to “migrate” to a higher severity code at a future date.
Question: So what happens if the foundation starts showing obvious signs of being a crumbling foundation, after a few years, and the buyer decides to try to file a claim with CFSIC?
Answer: If the buyer is making a Type 1 claim (replacement), the buyer can make that claim if nothing appears wrong with their foundation (severity class code 1) but they show pyrrhotite in the aggregate through a core test. If they are making a Type 1 claim, severity coded 3 or 2, they only need to present an updated visual examination report showing the engineer’s conclusion that they are a severity code 3 or 2.
If the professional engineer’s or CFSIC-certified home inspector’s exam at the time of sale, or at any point after the sale, indicates that the foundation is a severity class code 3 or 2...no core test will be needed at the time of the sale or at any other time in the future in order to be eligible to file a claim with CFSIC.