On Oct 16, 10:58*am, wrote:
On Thu, 15 Oct 2009 23:02:06 -0700 (PDT), Too_Many_Tools





wrote:
Anyone buying a house now or in the future should read this article.

Bear this in mind if you sheetrock your shop in the future.

TMT

Insurers dropping Chinese drywall policies
By BRIAN SKOLOFF, Associated Press Writer Brian Skoloff, Associated
Press Writer
Thu Oct 15, 2:10 pm ET

WEST PALM BEACH, Fla. – James and Maria Ivory's dreams of a relaxing
retirement on Florida's Gulf Coast were put on hold when they
discovered their new home had been built with Chinese drywall that
emits sulfuric fumes and corrodes pipes. It got worse when they asked
their insurer for help — and not only was their claim denied, but
they've been told their entire policy won't be renewed.

Thousands of homeowners nationwide who bought new houses constructed
from the defective building materials are finding their hopes dashed,
their lives in limbo. And experts warn that cases like the Ivorys', in
which insurers drop policies or send notices of non-renewal based on
the presence of Chinese drywall, will become rampant as insurance
companies process the hundreds of claims currently in the pipeline.

At least three insurers have already canceled or refused to renew
policies after homeowners sought their help replacing the bad
wallboard. Because mortgage companies require homeowners to insure
their properties, they are then at risk of foreclosure, yet no law
prevents the cancellations.

"This is like the small wave that's out on the horizon that's going to
continue to grow and grow until it becomes a tsunami," said Florida
attorney David Durkee, who represents hundreds of homeowners who are
suing builders, suppliers and manufacturers over the drywall.

During the height of the U.S. housing boom, with building materials in
short supply, American construction companies turned to Chinese-made
drywall because it was abundant and cheap. An Associated Press
analysis of shipping records found that more than 500 million pounds
of Chinese gypsum board was imported between 2004 and 2008 — enough to
have built tens of thousands of homes. They are heavily concentrated
in the Southeast, especially Florida and areas of Louisiana and
Mississippi hit hard by Hurricane Katrina.

The defective materials have been found by state and federal agencies
to emit "volatile sulfur compounds," and contain traces of strontium
sulfide, which can produce a rotten-egg odor, along with organic
compounds not found in American-made drywall. Homeowners complain the
fumes are corroding copper pipes, destroying TVs and air conditioners,
and blackening jewelry and silverware. Some believe the wallboard is
also making them ill.

The federal government is studying the problem and considering some
sort of relief for homeowners.

Meanwhile, the AP interviewed several homeowners who, like the Ivorys,
were unlucky enough to purchase properties built with Chinese drywall,
and are now being hit with a second and third wave of bad news: Their
insurers are declining to fill their claims, then canceling the policy
or issuing notices that policies won't be renewed until the problem is
fixed. The homeowners have little recourse since neither the Chinese
manufacturers nor the Chinese government are likely to respond to any
lawsuits or reimburse them for the defective drywall.

In each instance, the insurer learned of the drywall through a claim
filed by the homeowner seeking financial help with its removal.

The Ivorys have sued their builder, but it could take months for their
case and hundreds like it to work their way through the courts. In the
meantime, they have moved back to Colorado because their three-bedroom
ranch home two miles from the Gulf of Mexico is unlivable and soon
will be uninsured.

"It's been an emotional roller-coaster," said James Ivory, who is
still making mortgage payments on the house. "It was all in our heads,
nice weather down there, calm life, beaches. Now I don't know what to
do."

John Kuczwanski, a spokesman for the Ivorys' insurer, Citizens
Property Insurance Corp., said their claim was denied because the
drywall is considered a builder defect, which is not covered under the
policy. It also considers the drywall a pre-existing condition that
could lead to future damage, which is why the company won't renew the
policy unless the problem is fixed.

"If someone were to have bought a new car and there was a defective
part, would that person go to their auto insurance to get that fixed
or would they go back to the manufacturer?" Kuczwanski said. "We
provide insurance, not warranty service."

Citizens, a last-resort insurer backed by the state of Florida for
people who can't find affordable coverage elsewhere, has received 23
claims about Chinese drywall, and has so far denied five. Citizens
could not immediately say how many policies had been canceled or not
renewed because of the drywall.

Robert Hartwig, president of the Insurance Information Institute,
agreed that homeowners policies were never meant to cover "faulty,
inadequate or defective" workmanship, construction or materials.

Tom Zutell, spokesman for the Florida Office of Insurance Regulation,
said the cancellations are troubling, but legal. No law prevents
insurance companies from canceling policies because of Chinese
drywall.

"We are staying out of the fray at the moment," he said.

Even if a homeowner does not file a claim over the drywall and remains
covered, they could later be denied a claim for a fire or another
calamity if insurance investigators determine the home contained
undisclosed Chinese drywall.

"If you think that by not telling your insurance company about the
drywall that you're protected, you're sadly mistaken," Durkee said.

A newly married couple in Hallandale Beach, Fla., saved up for five
years to buy their first home only to later discover it had Chinese
drywall. They filed a claim with their insurer, Universal Insurance
Co. of North America, and were denied.

Universal then sent the couple a letter, stating their policy was
being dropped because "the dwelling was built with Chinese drywall."

The couple then signed on with Citizens, but didn't divulge the
drywall issue, and hasn't filed another claim. The 31-year-old man
requested anonymity because he's afraid of losing his insurance
policy, and thus his home.

"I honestly don't know what I'd do if that happened," he said. "All
this has basically taken us back five years. We saved money to buy
this home."

Universal did not respond to requests for comment.

Louisiana lawyer Daniel Becnel Jr., who represents more than 200
owners of homes containing Chinese drywall, is advising his clients to
avoid filing claims with their insurers or they could lose their
houses.

"I really believe everybody should have an insurance claim with this,"
Becnel said. "But it's hard to tell somebody to go make a claim, then
they lose their policy ... This is a nightmare for people."

"I tell people flat out if you file, you may lose your insurance,"
agreed Mississippi attorney Steve Mullins, who has about 100 clients
with Chinese drywall in their homes.

Chris Whitfield, a 29-year-old tire repairman, bought a house in
Picayune, Miss., after his home in Louisiana's St. Bernard Parish was
destroyed by Katrina. He soon discovered it was built with Chinese
drywall, and moved out because it was making his family sick.

His claim was denied by his insurer, Nationwide, which followed up
with notice that he would be dropped because his policy didn't cover
unoccupied dwellings.

Nationwide spokeswoman Liz Christopher declined to comment on
Whitfield's case and could not say how many drywall claims had been
submitted or how many policies had been canceled or not renewed.

Whitfield offered to move back into the house, but he said he was told
he'd first have to replace the drywall.

"I don't know what I'm going to do," he said.

___

Associated Press Writer Damian Grass in Miami contributed to this
report.

I feel bad for the owners but I am not sure this is really a problem
that is covered by your homeowner's insurance- Hide quoted text -

- Show quoted text -

I would agree...the problem seems to be the lack of retrieving damages
from the manufacturers and importers of the bad sheetrock.

It also means that any sheetrock you use from now on is suspect.

TMT