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State Senator

Paul Doyle

Representing Cromwell, Middletown, Newington, Rocky Hill & Wethersfield

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Sen. Doyle Advocates for Crumbling Foundation Homeowners in CT Supreme Court Brief

HARTFORD— After the Connecticut Supreme Court approved him to appear as amicus curiae in the case, Senator Paul Doyle (D-Wethersfield) last week filed a brief in the case of Karas v. Liberty Insurance Corp. in which he argues that a Connecticut Supreme Court decision in favor of the insurance company will have “seismic consequences” for homeowners with crumbling foundations as well as lenders, the real estate industry and municipalities across the state.

Arguing for all potentially impacted homeowners, Sen. Doyle states, “Without the sustained resources of these insurance companies, it may be many years, if ever, before the limited resources provided by state government have any effect on the imperiled homeowners, impacted municipalities, business and lending institutions in central, eastern and through Connecticut.”

In addition, Senator Doyle encourages the court to reject another argument by Liberty, which claims that the insurer is not liable until a foundation actually collapses. Homeowners are required by their insurance policy to take reasonable preventive measures to mitigate damage, which can reduce the cost of repair. They should not be incentivized to do anything to the contrary. Waiting for a foundation to collapse beyond the point when a house is safe to live in would only add to the cost of repairs and create unnecessary, elongated despair for homeowners.

“It’s simply not fair – or realistic – to force the affected homeowners to spend years watching their homes slowly, but literally, fall apart,” Sen. Doyle said. “As many as 35,000 single-family homes and condominiums in the north, east and central parts of Connecticut are affected. These structures were built between 1983 and 2015 in approximately 41 towns, and are currently experiencing or may experience cracking basement walls and crumbling and deteriorating foundations. Foundation repair costs between $150,000 and $250,000 per home.”

Background: Karas v. Liberty Insurance Corp.
The Connecticut Supreme Court is considering Karas v. Liberty Insurance Corp. and will determine how the undefined term “collapse” should be interpreted in a homeowner insurance policy. In 1987, the court held that the term “collapse,” when otherwise undefined by the policy, was “sufficiently ambiguous to include coverage for any substantial impairment of the structural integrity of a building.” That 1987 decision is now under review as crumbling foundation cases to date have sided with the insurance companies. The Connecticut Supreme Court’s decision in the Karas case could change everything, because by ruling on the Karas insurance policy the court will essentially rule on thousands of other Connecticut policies that use the term “collapse” without defining it.

Liberty has refused to cover the cost of repairs from pyrrhotite, arguing “collapse” means an immediate event. In arguing the term “collapse” should include deterioration and eventual collapse, Senator Doyle notes that when Liberty issued policies in other states, the insurer defined the term “collapse” as “the sudden and entire falling down or caving in of a building.” By not defining the “collapse” in Connecticut, Senator Doyle argues Liberty intentionally left the term to be interpreted more broadly. When Liberty set premium rates, Doyle argues in his brief that the insurer “built into its risk/cost analysis those insurance policies that do not provide a specific definition of collapse.” Although it collected premiums having calculated such risks of deteriorating foundations, it is has refused to pay out the policies that homeowners and mortgagees have rightfully relied upon.

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