At Least 2 Insurance Cos Dropping Florida Policyholders Who Filed Toxic Drywall Claims

[hatrack]

At least two home insurers in Florida have begun dropping policyholders who filed claims for property damage linked to drywall imported from China. Disputes with insurance companies are increasing as a growing number of homeowners file claims for property damage they say is caused by defective Chinese drywall. Insurers are fighting the claims and in some instances using the information in them to drop the policies. The Chinese drywall, also known as gypsum or wallboard, is under investigation by federal and state agencies, including the Consumer Product Safety Commission, for emitting sulfide fumes suspected of causing corrosion of electrical wires and plumbing.

Many affected families also have reported health symptoms, including skin irritation and respiratory difficulties, to the CPSC and state health agencies. As many as 100,000 houses across the country, most built in 2006 and 2007, may be affected based on estimates of the amount of drywall imported into the U.S. during the period.

Citizens Property Insurance Corp., a state-created, nonprofit corporation in Tallahassee that is the largest home insurer in Florida, confirmed that it has notified some policyholders who recently had filed claims for damage linked to Chinese drywall that their policies won't be renewed if the damage isn't repaired within six months of the date of notice. Citizens also holds the position that the claims aren't covered.

Citizens spokesman John Kuczwanski said the insurer hasn't paid any damage claims for Chinese drywall, citing policy exclusions for pollution and builder defects. He said it is standard procedure to require homeowners to repair conditions that could lead to further property damages and additional claims. "Corrosion leads to a likely future claim for a covered peril such as fire or a water leak," which the insurer would be responsible for covering, he said.

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