The Connecticut Insurance Department has updated a notice directing insurers to not cancel or non-renew an affected homeowner's insurance coverage as a result of a foundation found to be crumbling or otherwise deteriorating. This notice was sent to all insurers writing homeowners and condominium insurance in Connecticut, and is intended to protect Connecticut residents affected by crumbling foundations. The notice was initially issued in October 2015 and updated in January 2017 to extend the same protections to condominium associations' master insurance policies.
The notice can be accessed here - Crumbling Foundations Notice.
“It has come to my attention that affected homeowners who have filed a claim on their insurance policy because of a crumbling foundation or suspicion of having a crumbling foundation, or even just made an inquiry to their insurer on the topic, could have this held against them. I am taking this opportunity to inform both insurers and homeowners that this will not be allowed. Homeowners should not be afraid to file a claim or ask a question related to crumbling foundations. Under this notice, the denial that you are required to present to the Connecticut Foundation Solutions Indemnity Company to receive funding will not be held against you,"Commissioner Mais said.
The updated notice:
- Reminds carriers that state law prohibits cancelling or non-renewing a policy or increasing a policy's premium based solely on inquiries or a claim made on their insurance policy,
- Instructs insurers that the use of a Comprehensive Loss Underwriting Exchange (“CLUE") report or any other similar source of claim-related information concerning a crumbling foundation inquiry or claim will be prohibited in connection with underwriting, pricing and/or surcharging new or renewal business, and
- Informs insurers that the Department will not approve company underwriting rules or guidelines that would allow a homeowner to be cancelled or non-renewed or have a premium increase based solely on unrepaired crumbling foundation damage or on the property's crumbling foundation being in a current state of unrepair or under repair.
“This provides homeowners with additional reassurance that their premiums will not be increased nor will their policies be cancelled or non-renewed because of a crumbling foundations-related claim or inquiry to their insurance company. I want to again encourage my fellow Connecticut residents in the affected areas to reach out to the Insurance Department's Consumer Affairs Unit at any time with any questions or inquiries," Commissioner Mais said
Affected homeowners can apply for funds from the Connecticut Foundation Solutions Indemnity Company, Inc. on their website at crumblingfoundations.org.