Jason Cleri | Property Insurance Coverage Law Blog | January 9, 2019
I’ve previously written about the issues insureds are facing in Connecticut regarding crumbling foundations.
In a blow to insureds in Connecticut affected by crumbling foundations due to the infusion of pyrrhotite, a mineral which gradually deteriorates concrete when exposed to water and oxygen, the Federal District Court for Connecticut ruled that the insureds, Richard and Denise Hyde, did not prove their case to sufficiently to overcome Allstate’s motion to dismiss.1 The Hydes, who had been living at their property in Tolland for 18 years, decided it was time to sell. When they had an engineer inspect their property in anticipation of the sale, the pyrrhotite defect was discovered. The Hydes sued Allstate after the denial, claiming the policy language was ambiguous as to coverage.
The trial court dismissed the action on two grounds:
- The court noted that it did not believe an ambiguity existed in the policy language regarding what was considered “sudden and accidental.”
- Allstate argued, and the court agreed, that the gradual concrete decay was not sudden and accidental, nor did it qualify for coverage as an entire collapse. In addition, there were other policy exclusions, such as an exclusion for cracking walls, rust, and defective construction materials that precluded coverage.
As a silver lining to insureds, Gov. Dannel Malloy and State Attorney General George Jepsenannounced in a joint release that state had entered into a memorandum of understanding with Travelers Companies to assist current and former Travelers policyholders seeking financial assistance to remediate crumbling foundations.
Under the agreement, Travelers will establish and administer the voluntary Travelers Benefit Program and commit $5 million to the program in conjunction with an assistance program launching through the Connecticut Foundations Solutions Indemnity Company.
I leave you with a quote from author and life coach, Craig D. Lounsbrough, “[t]he thing that I’m most likely to collapse under is not the weight of the stresses that stand around me, but the ego that sits within me.”
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1 Hyde v. Allstate Ins. Co., No. 3:18-cv-00031 (D.Conn. Dec. 4, 2018).