Insurers dropping Chinese drywall policies

[meegbear]

Source: comcast.net Finance

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 the 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. "This is going to become critical mass very shortly."

Read more: http://www.comcast.net/articles/finance/20091015/US.Chi... /

[tomm2thumbs]

1. was wondering what was going on with all that Chinese poison-wall that was put in buildings

I can't imagine how many corporate buildings got that same stuff - and all the employees that will no doubt be getting ailments as a result. Tip of the iceberg I think on this one. Very scary stuff.

[juno jones]

2. Many of these insurance companies

are as intertwined at the root as Scooter's goddamn Aspens.

While AIG was being bailed out, there was talk of how 6 big companies own most the small ones in ALL aspects of insurance, thus are too big to fail. The health care debate has everything to do with the bailout last year. It's the same companies. Who are insuring homes, insuring health, insuring cars, insuring life insuring the further extension of capitalist greed...

Death of a thousand cuts, maybe. But perhaps the best strategy against these companies would be to open up multiple legal fronts. This is an interesting development.

On edit: Last Year's Wall Street debacle would have killed a few of them off, or clipped their wings considerably. No good deed goes unpunished, as my old father used to say.

[elehhhhna]

3. the BUILDER is liable and at least in the case of Lennar Homes, they are replacing

all the bad drywall etc. Kudos for them showing corporate responsibility.

If the HO policy is called in they'd subrogate to the builder, anyway. This can't be the whole story.

[marybourg]

4. Many builders have declared bankruptcy.nt.

[glinda]

5. how can we tell if we have chinese drywall????

[WriteDown]

8. Mongolians are constantly attacking your house. nt

[AwakeAtLast]

14. OMG - ROFLMAO!

[glinda]

15. Uh oh! My heritage is possibly part Mongol.

[Xolodno]

6. After the whole "Mold will kill you!!!!!!!!!!

...debacle and scam, every Property and Casualty insurer now hits the panic button then cut and run.

"Oh my, I might have mold how do I make sure it doesn't infect my whole house?" Ummm....try opening a window?

"Gasp...there is a black ugly spot of mold on my wall!" Ummm...get some bleach mixed with water in a squirt bottle, aim, squeeze the trigger, problem solved. Maybe you should "clean the house more thoroughly as well".

Every company now excludes or severely limits mold coverage. And there is STILL no solid science stating that it was deadly as it was proported to be. How many people have you heard of ending up in the hospital due to mold since the exemptions were put in?

What really PISSES me off....well, I won't go there and keep my blood pressure down.

[WriteDown]

9. I knew a woman a couple of years back....

who swore that mold gave her and her children neurological problems. She was in the process of suing the insurer, the lender, and the builder.

[dysfunctional press]

10. i think that 'csi' might have helped add to the mold hysteria...

they had an episode where a body builder inhaled some mold spores from inside his walls that eventually killed him, and made his head liquefy on the inside.

[DesertDiamond]

7. I have been thinking homeowners insurance should be the next reform target...

Having to buy different insurance policies for the same house, one for flood, one for earthquake, one for Chinese drywall.... NO!!!!! We pay for insurance, it does not matter what caused the damage. Damage is damage. We deserve to be able to collect.

[WriteDown]

11. Different animals...

Generally insurance doesn't cover preexisting conditions. If there is a big crack in the roof before you buy, generally your insurance is not going to provide a new roof once you've moved in.

[Xolodno]

12. Not as easy as it sounds...

When I bought my home I made sure I was NOT in a flood area and on a gentle slope. So why should I have to pay for flood insurance for being prudent while the idiot who bought in a sandy flood plain gets subsidized by my payment of premiums?

Another problem, premiums could go down if losses were spread on a regional basis (and if building codes were standardized in the regions). For example all hurricane zones in the affected states could pull together and frequency and severity of damage history could be used to determine premiums. Thus everyone in Florida wouldn't get hosed on high premiums, they would share a pool with all coastal areas that could run from Texas to North Carolina.

The same could be done on the West Coast for Earthquakes and the Mid-West for Tornado's. Most companies just want to cover your standard losses of fire, crime, water damage due to a bursting pipe, etc. Those are statistically predictable and easier to manage, an "Act of God" (or act of starving lawyers en masse sometimes)are far more difficult to predict and could bankrupt even the largest companies if their is enough damage wide spread. Unlike the health insurers, most Property and Casualty companies would be more than happy to relinquish this area to the Federal Government to regional pools and just collect a simple processing fee.

The problem is, insurance is still heavily state regulated and no state government is willing to have their residents to pay for disasters in another state. Particularly if one state gets lucky for awhile which drives premiums down and encourages people and business to relocate there....thus raising tax revenue's.

And of course regional pools would be regulated at the federal level and certain lobby groups don't want that as its much harder to sue the federal government.

[Anakin Skywalker]

13. Hah Hah Hah! The Fruits of Cheap Cost/Labor, etc. Capitalism at Its Best!

And the government is evil, says Rethugs and their idiot believers.