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The Russell Agency, LLC Blog

All You Ever Wanted to Know About Insurance

Crumbling Foundation Surcharge

Often, it is said that you cannot build something without having a strong

foundation in place. Unfortunately, many homeowners in Connecticut

have found out that is not actually the case.


Over the past few years, more and more Connecticut homeowners

have discovered that the concrete foundations of their homes have

cracked, and they are no longer structurally sound. This phenomenon

is caused by the presence of pyrrhotite, a naturally occurring mineral that

corrodes and causes massive cracking when exposed to groundwater. While

the true scope of the issue is not fully known—as it can take 20 or 30 years

for the problem to manifest—it already has affected hundreds of homeowners

in the state.


In order to provide relief to those impacted by this problem, the

Connecticut General Assembly recently passed legislation to establish a Health

Homes Fund. This fund is financed through surcharges on a variety of

insurance policies sold in the state.


Under the law, a $12 surcharge is imposed on homeowners, condo and

common-interest community policies. This surcharge is charged when the policy

is issued, and when the policy is renewed. It is important to note that this surcharge

is per policy and not per named insured. So, even if multiple people are listed as

insureds on a policy (e.g., a person and his or her spouse), the surcharge

remains $12.


The surcharge is not part of the insurance premium; it is a separate

charge. Under the law, the surcharge is payable in full upon commencement or

renewal of the policy, and no portion of such surcharge will be reimbursed if the

policy is canceled.


If you should have any questions on this surcharge, or anything else related to your

insurance policy, reach out to us for assistance.