Chinese Drywall Kills Home Insurance Policies

Posted October 18th, 2009
by HomeownersInsurance.org Staff (1 comment)

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Back in March, officials at the Consumer Product Safety Commission began looking into the claim that certain drywall manufactured in China may be causing problems in homes. As a response, many homeowners insurance companies have actually canceled homeowners policies.

The drywall in question was imported during the peak of the housing boom in the United States. The drywall is especially common in southeastern states, including Mississippi, Florida and Louisiana. The drywall materials are thought to emit certain fumes that contain trace amounts of a chemical that can cause a rotten-egg odor when it gets warmer and more humid.

These fumes are causing other damage, as well. They are causing copper pipes to become corroded, causing problems with electronics equipment such as televisions, and even causing silverware to be blackened. Some homeowners who have the Chinese drywall installed believe it is making them ill, although the health risks aren’t entirely clear at this point.

Not all homeowners insurance companies are being so hasty, however. There is one company in Florida, for example, that has decided to renew some policies, despite the presence of Chinese drywall. The company is Citizens Property Insurance Corporation, and it is one of Florida’s state-backed insurers of last resort.

Politicians have gotten into the mix and are trying to advocate for Florida homeowners in the situation. Senator Bill Nelson of Florida, for example, has sent a letter to 11 different Florida insurers, asking them to clarify their policies on Chinese drywall. The letters also express the senator’s outrage at the policies being cancelled.

Repairs to homes with the drywall in question can be extremely costly. The entire interior of the building has to be gutted, and all the while the homeowner has to pay their house payment, as well as pay for somewhere to live on a temporary basis. Further complicating the matter is the fact that the insurance companies are considering the problem a preexisting condition, and unable to continue to insure the home. In some cases, the costs of repairs exceed the purchase price of the home.

How widely spread the problem is isn’t known. However, based on shipping records, one company estimates that as many as 50,000 of 2,000 square feet or more may be affected. Of that number, Florida ports actually received drywall enough to make 30,000 of those homes, meaning that the primary location for these homes is likely to be that state.

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Categories: Home Construction

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  • Posted November 6th, 2009 by creekmaster at 3:08 pm - Reply

    Sounds pretty interesting. Who knew drywall could turn out to be disastrous and cause so many problems.


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