CT Supreme Court Foundation Ruling Favors Insurance Companies

NORTH-CENTRAL CONNECTICUT — In what arguably read like a straight business decision, the Connecticut Supreme Court on Tuesday released a decision noting that, because of language in their policies, insurance companies are not obligated to cover homes in the state with structural damage caused by crumbling concrete foundations.

It seemed to come down to one buzzword — "collapse."

In the case — STEVEN KARAS ET AL. v. LIBERTY INSURANCE CORPORATION ( SC 20149) — legal teams from insurance companies argued that the word referred to something that deteriorates over a period of years, and is therefore not covered because the "collapse" will not immediately take place or has taken place. Lawyers representing homeowners argued that "collapse" points to a compromised structural integrity, and homes should therefore be covered.

The top court's decision said the term "collapse" is not "vague," thus a house would have to be "uninhabitable" and fallen over to be covered.

U.S. Rep. Joe Courtney, who has helped set up federal avenues for foundation repairs that can cost about $150,000 and up, did not take kindly to the decision.

"(Tuesday's) decisions by the Connecticut Supreme Court unfortunately rewards the insurance industry’s concerted efforts to avoid the risk of crumbling foundations, rather than share the risk across the millions of policy holders," Courtney said. "As major stakeholders who stand to lose market value the longer this problem festers, hopefully the industry will take a longer view and step up as they should to join state, local and federal officials who have provided tangible relief to fix this problem."

In a summary, the state Supreme Court said, "We, of course, recognize the seriousness of the crumbling foundations problem that confronts the plaintiffs in the present case, and we also acknowledge the gravity of the problem for so many other homeowners statewide. Our sole task, however, is to construe the plaintiffs’ homeowners insurance policy as we would any other such contract, that is, in accordance with its terms as applied to the facts of the case. We have endeavored to do so here."

Ironically, last week, Gov. Ned Lamont announced an extension of a funding program for the crumbling foundation epidemic in north-Central Connecticut after the state Bond Commission met.

Thousands of homes roughtly two and three decades old in north-central and parts of eastern Connectcut have been plagued by crumbling foundations linked to an infamous bad batch of concrete infected with the mineral pyrrhotite from a Stafford quarry.