Hundreds of homeowners in eastern Connecticut who are dealing with crumbling foundations, could soon have access to a $52.5 million pool of money, but how much each homeowner would get is still unclear.
NBC Connecticut Troubleshooters learned the state spent months negotiating the insurance industry to create programs to provide homeowners in Hartford, Tolland and Windham counties with up to 90 percent of the cost of replacing their foundations.
Several state agencies and Governor Dannel Malloy have been directly involved in the process.
"This is a multi-pronged approach in government to reach out to the insurers as well as the folks affected to try to see if we can bring some level of relief," Malloy said.
Here's how the program would work:
The state pinpoints ground zero of the foundation problem in Stafford. Any Connecticut homeowner living within a 20 mile radius would be eligible to apply for the program. State officials acknowledge there are few homeowners with crumbling foundations just outside the 20 mile radius, but they would still be eligible to apply for the program.
In order to qualify, a licensed home inspector must verify that a home shows "map cracking", which is a telltale sign of the oxidizing iron sulfide mineral pyrrhotite, which the state says is causing the concrete to deteriorate.
Insurers can require a homeowner to get a test that shows at least 15 percent composition of reactive pyrrhotite in the concrete aggregate.
The insurance company would cover 50 percent of the cost of the test, but would reimburse a homeowner's share, if the home ultimately qualifies for the program.
Once the application process is done, the state's department of insurance would calculate of the total cost of all the verified claims.
At that point, each homeowner would be offered a minimum amount, a percentage of the cost of replacing the foundation, based on how many homeowners are in the pool.
To date, only 235 homeowners have filed claims with the state, but high ranking officials, including Malloy, expect many more would come forward if this insurance pool becomes a reality.
"Part of the problem of these discussions are, what is the scope, what is the size? So the sooner we have a better idea, the easier it is to reach a final agreement," Malloy said.
Sources tell NBC Connecticut Troubleshooters the negotiations provided several potential benefits to entice companies to participate, including the fact that the Department of Insurance assured the companies that they could make up any money spent in the foundations pool by raising rates for Connecticut homeowners in the future
Nevertheless, at this point, only four companies have agreed to take part, including Travelers and the Hartford and Amica. Some of the firms with the largest market share in the state have not joined the pool, so far.
"We have had positive conversations with a number of the companies. A number of companies are saying, 'hey, I want to know what the rest of the companies are doing'", Malloy said.
Among the insurers with the largest market share in Connecticut, Liberty Mutual, AllState and State Farm have not yet agreed to take part in the program.
NBC Connecticut Troubleshooters reached out to all three companies. Liberty mutual and State Farm declined to comment, but in a statement to NBC Connecticut, All-State writes:
"In light of the general belief that the issue with the concrete is due to defective concrete and/or the improper mixing and installation of the concrete, we believe that the focus should be on the concrete manufacturer and the contractors involved in its installation."
The governor believes more companies will sign on once they grasp of the scope of the problem.
"To understand what their total liability might be, if not probable, but what the exposure would be and that hopefully will lead us to some discussions that will bring in other companies," Malloy said.
Sources said there is no formal deadline for more companies to come into the crumbling foundations pool, but there's a sense that if the state can't get a critical level of market share to commit by the end of the summer, the deal will be dead.