A new $12 annual surcharge will begin being levied on certain homeowner insurance policies in Connecticut from Jan. 1 until Dec. 31, 2029, under a new state law.

Under the law, 85 percent of the revenue generated from the surcharge will be deposited into the Crumbling Foundations Assistance fund to help homeowners with concrete foundations damaged by the presence of pyrrhotite, an iron sulfide that reacts naturally with water and oxygen, causing the concrete to crack and crumble.

The remaining 15 percent will be used to fund grants to help certain homeowners in New Haven and Woodbridge with other structural damage issues, and for lead, radon and other contaminant abatement activities.

An estimated 35,000 homes in Connecticut and Massachusetts are affected by the issue. Replacing a foundation can cost $100,000 to $200,000. Three cases related to the issue are currently before the state Supreme Court. Allstate recently won a federal lawsuit on the issue.