By Nadia Vanderhoof
TCPalm

Several major insurance companies are dispelling rumors that Treasure Coast homes containing Chinese drywall are instantly dropped once a homeowner confirms the questionable materials are found in a home.

Still other insurers remain silent on how they plan to deal with homes containing Chinese drywall.

While that might seem like good news, the bad news is those submitting insurance claims to replace Chinese drywall are being denied because the Florida Department of Health, U.S. Centers for Disease Control and Prevention and U.S. Consumer Product Safety Commission have not linked Chinese drywall sulphur emissions to the metal corrosions and health problems reported by homeowners claiming to have the drywall. There is no nationwide protocol established to handle Chinese drywall damages and consumers often are burdened with extensive drywall replacement costs and possibly even medical issues, through no fault of their own.

Florida Office of Insurance Regulation spokesman Jack McDermott said his office is aware that some insurance companies are denying claims for the replacement of Chinese drywall. Florida law states payment of any insurance claims are at the discretion of insurance companies.

“The commissioner (Kevin McCarty) is very concerned about this issue … (he) is working with national regulators to analyze the issues, and to generate ideas to address this issue, which may require legislation on the state and federal level,” McDermott said.

State-run Citizens Property Insurance Corp. said having Chinese drywall would not result in a policy cancellation. Additionally, homeowners dropped by another insurer because of Chinese drywall would be able to get coverage with Citizens as long as they meet all other eligibility criteria. Citizens, however, isn’t paying homeowners Chinese drywall claims and has no plans to in the future. So far 30 Chinese drywall claims have been filed statewide with Citizens. None are from the Treasure Coast.

“Citizens policy specifically excludes payment of claims resulting from workmanship, building material issues and further excludes coverage for damage from the emission of gases,” Citizens spokesman John Kuczwanski said.

Amy Moore, spokeswoman for Castle Key Insurance, formerly Allstate Insurance Co., said the company has a similar policy.

“Based on the information we currently have, Allstate is currently not nonrenewing its homeowners policies with customers solely because their homes may contain defective drywall made in China,” Moore said. “Allstate has not paid out on any claims related to the presence of drywall manufactured in China.”

Dick Luedke, spokesman for State Farm Florida, characterized Chinese drywall as a manufacturing defect that should be covered by a builder or contractor’s warranty. So far, the company has received 25 Chinese drywall claims in Florida. He declined to comment on whether any of those claims were from the Treasure Coast, but said the company has no plans to cancel a policy because the dwelling contains Chinese drywall.

“The request to replace Chinese drywall or other parts of a home simply because its defective is not covered by a homeowners policy because the most common coverage used there is provided by the product warranty,” Luedke said.

Universal Insurance Holdings Inc., USAA, Tower Hill Insurance and St. Johns Insurance Co. did not respond to calls and e-mails inquiring about their renewal policies on homes containing Chinese drywall and whether the companies would pay for claims associated with Chinese drywall.

Gov. Charlie Crist’s office declined to talk specifically about what recourse residents have when dealing with a Chinese drywall insurance claim that’s been denied or a situation where the homeowner is dropped by their insurer because of having the Chinese drywall in a home.

“At this time, we are not aware of any pending legislation regarding Chinese drywall or legislative proposals to change state law relating to homeowners insurance policies,” Gov. Crist spokesman Sterling Ivey said.

The Associated Press has reported that Sunrise-based GL Homes and Lennar Corp. of Miami have agreed to fix homes with Chinese drywall at no cost to the homeowners. Additionally, a class-action lawsuit has been filed against Chinese drywall manufacturer, Knauf Plasterboard Tianjin Co. Ltd., under U.S. court procedures.

Meanwhile, Sen. Bill Nelson, D-Fla., has aggressively advocated for answers and assistance for affected homeowners. Rep. Tom Rooney, R-Tequesta plans to visit a home with Chinese drywall in St. Lucie County the week after Christmas.

“We’re working to come up with different solutions on a national level to fix the problem,” said Rooney’s spokesman Jeff Ostermayer. According to the Florida Department of Health, 10 homeowners in Martin County have registered complaints with the agency about possibly having Chinese drywall in their homes. Another 34 in Indian River County registered complaints with the agency and a staggering 74 homeowners in St. Lucie County made complaints about possibly having the dreaded drywall in their homes.

Those who have Chinese drywall claim that in addition to severe health problems, they must also deal with intrusive testing, expensive repairs and the costs associated with finding alternative housing while repairs are made.

The Consumer Product Safety Commission, which has spent more than $3.5 million on its own investigation into Chinese drywall, has received about 2,276 Chinese drywall complaints from 32 states, the District of Columbia and Puerto Rico.

According to a recent report by the Wall Street Journal, Chinese drywall damages nationwide could range from $15 billion to $25 billion, with each home costing about $100,000 to replace bad drywall, corroded electrical wiring and appliances. With some builders voluntarily replacing bad drywall and other cases in litigation, it’s unclear who is ultimately responsible for Chinese drywall damage.

Lynne McChristian, Florida spokeswoman the New York-based Insurance Information Institute, said she is not aware of insurance companies not renewing policies because of problems related to Chinese drywall. But without state regulators and federal agencies issuing specific recommendations on how to deal with Chinese drywall, questions and problems surrounding Chinese drywall will remain until a nationwide protocol is established.

“There are so many unknowns surrounding imported drywall and, just like homeowners, insurers are awaiting both evidence of the types of damage the drywall may cause and recommendations on how best to remove it,” McChristian said.

This entry was posted on Saturday, December 12th, 2009 at 11:55 am and is filed under Stuart. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.