Chinese Drywall

[wally world]

I'm sure most have heard of the glut of homes in the SE that were repaired or built with Chinese drywall. And while I agree that homeowners' insurers should not be holding the bag for these claims, it also seems strange that policyholders can be non-renewed for having Chinese drywall in their homes as some of these folks have claimed. After all, if the Chinese drywall won't lead to claims, why should I non-renew the policy? I have to say I'm somewhat on the insureds' side in these cases. Or am I missing something?

http://articles.moneycentral.msn.com...insurance.aspx

[MountainHawk]

Fairly simple:

(1) Coverage for bad/poor craftsmanship/materials is not provided by homeowners insurance, but by the GL policy of the contractor that installed it. Go sue them.

(2) Chinese drywall increases the risk that a covered claim will occur in the future (e.g.: sudden release of water due to corroded pipes). I think it's an overreaction to cancel, and instead they should just have a rating factor for it, but if regulators aren't willing to approve those factors, then the non-renewals are going to be forthcoming.

[Bob the Nob]

Originally Posted by MountainHawk

Fairly simple:

(1) Coverage for bad/poor craftsmanship/materials is not provided by homeowners insurance, but by the GL policy of the contractor that installed it. Go sue them.

Why would this be a reason for a carrier to cancel a HO policy?

[MountainHawk]

Originally Posted by Bob the Nob

Why would this be a reason for a carrier to cancel a HO policy?

That is the reason for denying the claims.

#2 is the reason for cancelling the policy.

[wally world]

I didn't see the part about corroding pipes. That makes sense to me. What the hell is in this stuff that it is eating through plumbing for goodness sake?

[Bob the Nob]

I would guess that carriers may also be concerned that regulators/legislators will find HO coverage where none was intended.

[ajstudies]

Originally Posted by MountainHawk

Fairly simple:

(1) Coverage for bad/poor craftsmanship/materials is not provided by homeowners insurance, but by the GL policy of the contractor that installed it. Go sue them.

I have been wondering why folks seem to be all up in arms against the insurance company vs. the contractor who purchased the shoddy materials to start with. I'm sure the contractors disclosed this fully and passed along the discount to the homeowners.

[Coffee Coffee]

Originally Posted by wally world

I didn't see the part about corroding pipes. That makes sense to me. What the hell is in this stuff that it is eating through plumbing for goodness sake?

One of the first times I read about Chinese drywall was about someone whose insulin pump kept needing to be replaced b/c the copper springs it in kept dissolving

[WadotNChew]

Originally Posted by wally world

I didn't see the part about corroding pipes. That makes sense to me. What the hell is in this stuff that it is eating through plumbing for goodness sake?

An article I read about a year ago mentioned that an analysis showed some amounts of hazardous waste in the material, among other things. I don't recall if they said there were trace amounts, or what specifically they were. I have the article at work, will look for it after my exam.

[silverfox]

Originally Posted by Bob the Nob

I would guess that carriers may also be concerned that regulators/legislators will find HO coverage where none was intended.

This is my fear. The homeowners find out their contractor/vendor closed up shop. Can't sue the Chinese manufacturer. Homeowners footed with the bill and the regulators/juries feel bad for the homeowners. Southeast is a hostile legal environment for insurers.