OT - Insurers dropping Chinese drywall policies

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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.
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On Thu, 15 Oct 2009 23:02:06 -0700 (PDT), Too_Many_Tools

I feel bad for the owners but I am not sure this is really a problem that is covered by your homeowner's insurance
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On Oct 16, 10:58 am, snipped-for-privacy@aol.com wrote:

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
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Nonsense. The homeowners need to go after the *builders* who used low-quality materials.

More nonsense (like nearly everything you post). There is no reason at all to be suspicious of sheetrock that was manufactured in the U.S. or Canada.
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On Oct 16, 1:53 pm, snipped-for-privacy@milmac.com (Doug Miller) wrote:

So, if your brand new car burst into flame you'd sue the dealer? Relying to nonsense with nonsense doesn't make sense.
R
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Of course not. I'd sue the manufacturer of the car. Just like the owners of the homes with Chinese drywall need to do: sue the manufacturer of the home.

Your analogy is, to put it charitably, severely flawed.
Hint #1: Who is the manufacturer of a house? Hint #2: It's not the company that made the drywall, or the forester that grew the trees that the framing was milled from.
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On Oct 16, 4:01 pm, snipped-for-privacy@milmac.com (Doug Miller) wrote:

Your understanding of how the legal system works is severely flawed, which is why you didn't understand my analogy.
Rule one is to go after the guys with the deepest pockets. The builder isn't it.
R
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RicodJour wrote:

The builder probably just ordered 1/2" (or whatever) drywall from a supply house, who provided them with the Chinese stuff. You'd have to go farther up the supply chain to find out who was really negligent.
Now if a builder *knew* that Chinese drywall was dangerous/defective when he took delivery of it, you might be able to prove something there. But proving that would be difficult, even if it were true.
nate
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wrote:

It may be that no one was negligent, at least not initially. It's possible that everyone involved, from the maker of the drywall on down didn't realize there was any problem with the raw materials being used. It's always possible, in hindsight, to say someone "should have known".
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RicodJour wrote:

No, but likely he has insurance which will at least buy a new BMW for a lawyer because the lawyers typically will name the contractor and the insurance will settle because that is cheaper than presenting a defense. It isn't the grand prize but not too bad for mailing out a couple sheets of paper stapled into a blue folder.
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I understood your analogy perfectly well. It's just a very bad analogy.

Obviously your own understanding of the legal system could use a little, umm, enhancement. You can sue anyone you want. *Recovering* from someone who hasn't any liability might be a bit of a problem, though. If a home is built with substandard materials, the liability _to the homeowner_ rests with the builder, not with the manufacturer of the substandard material.
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On Sat, 17 Oct 2009 02:02:09 GMT, snipped-for-privacy@milmac.com (Doug Miller) wrote:

it's not that simple. In this case there has been nothing put forward that suggests the builder failed in any of his duties. There is no law that requires him to run tests on drywall for things that have never happened before. From what I've read, the only party that might have liability would be the maker of the drywall, and good luck collecting from some factory in China. For small problems a large builder will often just fix them, like if a pipe burst in one house because the copper run was defective he might just fix it. But if it was discovered that all the copper in an entire subdivision was defective and the pipes were bursting (like happened with the first plastic pipes) it would be the pipe manufacturer on the hook, which I believe is what happened with the plastic pipe.
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snipped-for-privacy@milmac.com (Doug Miller) wrote:

One does not have insurance to afford to lose a suit. One has insurance to afford to WIN it.
--
An old friend once said "You don\'t live on the edge,
you\'re taking up way too much space."
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Non-sequitur.
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Not at all. One does not have insurance to pay for losing a suit. One has insurance to pay the attorneys to fight it.
--
An old friend once said "You don\'t live on the edge,
you\'re taking up way too much space."
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On Fri, 16 Oct 2009 13:44:46 -0700 (PDT), RicodJour

Nor is the manufacturer of the drywall - you would also need to sue in a Chinese court. The "logical" choice would be the importer of the crap - if you can determine exactly who that was - and he (it) will likely have less assets than the builder, and no product liability insurance. "judgement-proof" is the term usually used.
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Do the Chinese have a court system... or do they just execute the CEO and 5 or 10 of is closest friends?
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Doug Miller wrote:

LOL, and you'd have a hard time going after the drywall manufacturer in China!
The builder is the one to go after. They have the deepest pockets and they have insurance to cover this sort of thing.
I have a rental townhouse where after four years some latent defects showed up. We didn't even have to threaten to sue, we went straight to the builder's insurance company, even though the builder was out of business they had had to purchase insurance against latent defects. We were lucky, just some decks that had footings that were sinking that cost the insurer only maybe $80,000 to fix while a nearby complex had upper level decks that were falling off the building due to poor materials.
It's scary to look at some of the building materials used in new construction.
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wrote:

Going up in flames may be hard to prove it was the dealer or the builder. There has been cases where the cars hit in the rear and burst into flames people sued the motor company. Also a truck that had the gas filler just behind the driver had the builder sued when it turned over on its side and burst into flames. The builder lost in both cases. The companies that made or used asbestos were sued. This was years after it was discovered it was bad for people's health.
The home owner should go after the builder for using substandard materials and the supplier in China. If they do not pay for the replacement then the US should not allow any imports from China of anything.
We should not be buying things from them anyway. Look at all the problems their substandard items have caused health wise. Lead in items. I think it was something in the paint of toys that turned into a drug that affected young children when they licked it.
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RicodJour wrote:

Absolutely if he hired the typical pirate law firm. They would comb for whomever had wealth they could transfer to themselves and could be associated in any way. It builds up the take because if they sue you you must present a defense or bargain to be released. Often in the case of the car dealer their insurer might offer $100,000 to make them go away.
Without going into big detail my buddy had a car for his daughter to commute to college. The car died and he signed the title to dispose of it as junk and gave it to a garage who was supposed to have it scrapped. Instead they built a Frankencar and sold it. Two young men died when the car burned in a wooded area (drugs and alcohol were involved). Along with the car manufacturer and car parts manufacturer they are suing my buddy for around what wealth they discovered because they claim some service bulletin wasn't done sometime in the past when he owned the car. You can't make this stuff up.
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