This is a not a story of an insurance entity’s bad faith or questionable failure to act regarding a relatively limited number of policyholder complaints. Rather, it is a flat-out singular tale chronicling a huge issue confronting potentially 35,000 or more homeowners in one state.
That issue can be summed up by a single word: pyrrhotite. That tricky-looking word is the designation for an iron sulfide mineral. Pyrrhotite does not have any strongly noxious or adverse properties per se, but it is a beast when its characteristics are manifested in a home-building context.
Here’s why: When interacting with oxygen and water over time, pyrrhotite, well, acts up. Given that it has been found in quarries where rock is removed to make concrete for home foundations, the implications of its reaction to other elements is obvious in the residential property sphere.
To wit: The concrete in home foundations cracks and buckles. A recent national news piece on pyrrhotite calls the mineral a “slow-moving disaster” where it is a component in concrete. Its presence ultimately makes residences “unsellable and unlivable.”
Many thousands of Connecticut homeowners who likely never even heard the word pyrrhotite a few short years ago now know all about its destructive reaction to other elements. Their houses are ruined.
In fact, the matter is so huge – legions of homes in the state have foundations made of pyrrhotite-laden rocks extracted from a single quarry – that multiple insurance companies have stated they cannot respond to the fallout.
As a result, lawmakers in that state have created a special single-purpose insurance company to pay on the thousands of extant – and growing – homeowners’ claims. That entity is funded through state grants, spikes on insurance premiums and other sources.
Its administrator says the problem is simply too big to deal with under current circumstances. Superintendent Michael Maglaras acknowledges he has well over $100 million to work with, but that he has “at least a $1 billion problem.”
State officials are looking for federal help, coupled with a nationwide standard on acceptable pyrrhotite levels in quarries.