Insurers dropping Chinese drywall policies - Toxic drywall forces thousands of Americans to live in limbo

Submitted by Quest-News-Serv... on Thu, 10/15/2009 - 13:38.

In this Wednesday, Oct. 14, 2009 photo, a sign posted by the developers of

Insurers dropping Chinese drywall policies

 
AP – In this Wednesday, Oct. 14, 2009 photo, a sign posted by the developers of Boynton Waters housing development …



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 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."

During the height of the U.S. housing boom, with building materials in short supply, American construction companies imported millions of pounds of 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.

The defective materials have since 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, 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.

One of Mullins' clients, Chris Whitfield, a 29-year-old tire repairman in Picayune, Miss., says he moved out of his house because the drywall was making his family sick. His claim was then 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.

http://news.yahoo.com/s/ap/20091015/ap_on_re_us/us_chinese_drywall

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How do you fight a war

How do you fight a war without bullets and bombs?

If we keep buying stuff from China and it is not the same as the stuff we can expect to get here, simply stop buying from China.

Trade and relations are wonderful, but tainted when the traded goods are killing us ever so slowly. Who needs bullets, death by drywall is subtle and effective. Maybe there is no war. Maybe they are innocent and don't know what they are using to make the drywall. We tell them, inspect it and continue to do business or let them kill us ever so slowly.

Don't just trade my object for your object, trade for quality, for worth, for value and safety.

Folks, please don't think because others embrace open markets, capitalism or democracy that they embrace also the integrity, honesty, fairness, trust and other things we have cultivated and agree to with a handshake. Being friendly and letting down your business guard makes you a sucker.

In the past, imported things were special, now they are the norm. We don't fight with China, allow their political flavor on our TVs, but they make stuff to line our living spaces. I thought we had building material standards. Our friends look out for us, so should our trading partners.

Integrity, honesty,

Integrity, honesty, fairness, and trust?  Do these qualities exist anymore?  Isn't the lack of these characteristics what helped cause the financial meltdown here in the United States?  The new 'rule' is that if it makes you richer it is good.  We have been bought.

In all cases, in America, buyer beware

In most homes, the inside air is more polluted than outdoors, even in polluted places like Cleveland.

Here, you have the outside pollution seeping in and the toxins in all the products and surfaces in your home, which America does not really regulate.

Old homes are typically full of lead, lead, lead, and lots of other harmful substances. Newer homes were built with God knows what!!?! If a newer homes is full of materials from China, God doesn't even know what chemicals may contaminate the home.

Because of what our family learned from people on REALNEO, we renovated an old home to eliminate all lead hazards (pipes and paint, indoors and out... soil included) and we kept the old wood and plaster and painted and sealed that with no and low VOC products, including using milk paint, which is very cool.

No wall papers, vinyl, composites, carpets, etc. - no synthetic fabrics on anything - clean with hepa vacs and natural cleaners.

Keep out the pesticides and toxic cleaners and bugs and you can make a good old house into a pretty safe environment.

You can't do that with a new house made in China.

Disrupt IT

I want a concrete home, and

I want a concrete home, and the interior walls coated with acrylic.

All the furniture made of wood and cotton.

Hot water heating with a duct systems that has a Hepa filter.

Geothermal with an electric heat pump.

I can live in 500 sq ft.

put my cube near a green space…..make the whole thing in china and ship it back here!

ward14resident

We Clevelanders (and Ohioians) will really be bought even more if the casino issue passes. 

Desperate times. 

Desperate times. 

We war with container ships & intermodal Trojan Trains

 

 
The dry wall/gypsum board industry in the Eastern United States has a history of conspiracy to monopolize the market.  
 
United States vs United States Gypsum Co, et al, a Sherman Anti-trust act federal suit was filed against the gypsum board manufactures in 1940 and decided in 1950 against the gypsum manufactures.  
 
In 1996 United States vs Georgia Pacific Company a similar Clayton Act complaint was filed to stop Georgia Pacific from monopolizing production of dry wall in New England.
 
There were other similar federal suits between 1950 and 1996 against various drywall companies.  In this industry (as in almost every industry), competition and “free enterprise are  myth.   
 
So who established the dry-wall plants in China?   Were the plants set up by US drywall companies (or French or German, or Indian, etc companies?)    Or did the Chinese come up with the process equipment and materials and technology to produce the drywall themselves?
 
If the Chinese dry wall was entering the southeast market in large quantities, its entry would have been noticed by local drywall suppliers.    Did any of these local suppliers  complain about the off- shore dry wall or request tariffs on the imported drywall?   If not, why not?
 
One would think that the imported drywall would have been sold and distributed by established drywall companies in the SouthEast – distribution companies which had franchised dealerships with US drywall producers.
 
Why didn’t the US drywall suppliers scream out when millions of square feet of imported drywall was handled by their franchises?
 
Would it be plausible that several of the US drywall manufactures were involved in the Chinese production and the import of this offshore, non-union produced, cheaper, more profitable  drywall product?
 
I think so.  It’s the kind of deal which fits the tawdry history in the drywall business.

 

shiliuhuang in drywall!

The federal government is investigating, these report are very informative.

 

http://www.epa.gov/oswer/docs/chinesedrywall.pdf

www.cpsc.gov/info/drywall/drywallstatus07092009.pdf   

shiliuhuang in drywall!    ahaha soo yu make fireworks....so sorry does house smell like 1000 year old egg?      

Shouldn't we be testing before not after?      

fly ash

This also helps explain,

In the US nearly 60 million tons of fly ash are used to manufacturer construction material, 80% of that is used in the manufacture of synthetic drywall.

In the US coal fired plants scrub the sulfur out, so that the fly ash should not contain sulfur.

This may not have been the case in Chinese products, it may in fact be synthetic drywall and made with fly ash that contained sulfur.

http://www.gntlaw.com/content/submitted-testimony-chinese-drywall-by-robert-gary-.pdf

All power plants in the US sell their fly ash, and that may be the case in China and it is being reported not to be wide spread in that country.

This could be a case of contaminated products dumped in the US and unscrupulous people that sold and bought it. It is often true you get what you pay for, and in this case pretty obvious.

Could have been as many as 5 million sheets of this sold in the US? That’s a lot of redo I think, I can see why the insurance companies are freaking out, but they need to put up and pay out to redo these homes and then go down the liability chain. Lazy I think, its the builder and then the supplier and then the distributor, track it back file claims at every level and settle on verifiable links in the chain.

If it cost ten thousand to redo it, then do it and file on the contractor, settle with them if they define the source of the products, then sue them down the line. Its inferior and unsafe, to handle that this is how it is done; if you use or sell an inferior product that is a health risk your liable.

It will ultimately reach china liablity then the settlement should be with them and them purchasing preceptors and scrubbers for the power plants.

Everyone slapped on this, each person in the chain, slapped in the head, shame on the insurance companies, they sure have become useless, if its not about taking your money they cannot be bothered.

Considering how cheap

Considering how cheap drywall is and it cost to transport, the Chinese product was bought to meet the demand? More than likely bought up by the people that make it and sell it here.

If the demand was high then that batch was what perhaps nobody else wanted, obviously it was bad and those in the supply line would have known that.

I still think that the liability and responsibility needs to be laid out and all that touched it called out and named.

Selling it was irresponsible and childish, dangerously irresponsible without recourse then things like this keep happening.

If they work backward on it and threaten big as they go the whole supply chain will get disclosed and then the whole supply chain is held accountable.

I read that customs had some troubles because the product code for drywall is the same as acoustical ceiling tiles. That being they share the same code and that makes it difficult to track the imports? It makes think they should check the acoustical tiles as well, see what’s in those.

I would not expect the cheap imports to last forever, they will not.

What is happening in China is that eventually the domestic market will consume the products and as it move in that direction the costs and prices will go up. They have been holding them down to build what could be called a critical mass.

Working with and developing and refining their manufacturing and supply lines will eventually bring about an equilibrium, eventually the manufacturing and aspect of it becomes domestic. Formal and well defined distribution should be the goal.

They know it and are being dawn into cheap and unaccountable fast and easy by those in the US looking to make quick buck.

The Chinese are 10:1 that being for every ten people there is one here. That country is changing rapidly and the lines of communication and economic ties are opening and clearing more and more with each year.

The US should be offering educational and training programs in the US and there as well.

Everything is a total operating function, the transportation and manufacturing needs to be bidirectional and refined and highly accountable. When factors change then shifts should be more organic, that’s all a function of adaptability and interoperability.

The US will loose and is loosing because we are not doing it better and for less, we are adding costs and often no value.

Recourse and resolve is what should happen in this case, those behind this cannot be let go, people need to know if you do not identify wrongs as they happen you are part of the wrong.

The US must depreciate itself, it must draw down costs and labor. The breakeven has to be defined some will rise to it and other must decrease to meet it.

The global and more universal world has to be more modest and humble, it has to me much more accountable and efficient.