Chinese Drywall Victims Finding Homeowners Insurance Won't HelpJun 10, 2009 | Parker Waichman LLP
Homeowners plagued by Chinese drywall are finding that their insurance policies won't cover the damage caused by the material's fumes. According to BradentonHerald.com, insurance companies are citing provisions in homeowners policies that exclude coverage for damages caused by pollution and construction defects.
Homeowners in at least 18 states have complained that fumes from Chinese-made drywall produce a “rotten eggs” odor and cause metals, such as air conditioning coils, to corrode. The fumes have also been associated with respiratory and sinus problems in some residents. According to a recent Wall Street Journal article, the U.S. imported roughly 309 million square feet of drywall from China during the housing boom from 2004 to 2007. Some estimates say as many as 100,000 homes in the U.S. could have been built with Chinese drywall.
Last month, the Environmental Protection Agency released results of tests it conducted that compared Chinese drywall to American-made material. The tests found sulfur and two organic compounds associated with acrylic paint in the Chinese drywall that were not present in the American wallboard. The agency said more testing is needed to determine if any of the compounds found in the Chinese drywall are responsible for problems reported by homeowners.
A spokesperson with the American Insurance Association told BradentonHerald that insurance companies in many states have received claims regarding Chinese drywall damage, but could not say how many. The spokesperson also said most so far have come from states where high humidity is prevalent - such as Florida.
According to one Florida attorney handling drywall cases, insurers are rejecting claims "across the board," BradentonHerald.com said. However, the lawyer said he still recommends that people with Chinese drywall damages file a claim with their homeowner's insurance carrier so that the company has notice that the material is in the home.
According to BradentonHerald.com, many homeowners might have better luck if they file claims under the builder’s, drywall supplier’s or drywall manufacturer’s commercial general-liability policy. However, there is no guarantee that will work.
All of this uncertainty likely accounts for the surge in Chinese drywall lawsuits that have been filed in several states since January. According to one report, around 15,000 plaintiffs have so far joined more than 150 such lawsuits filed in state and federal courts around the country this year.