Private insurers have been making tweaks to their coverage plans all over the country.
Citizens Property Insurance is following suit by dropping coverage on properties with damage from Chinese drywall. The first time it had proposed such a move, back in 2009, it met harsh rebuke. As a state funded organization, it is often seen as the last coverage provided to offer service when no one else would.
In a report from 2009, drywall from China was found to be responsible for a number of damages to homes including the corrosion of pipes.
Spokeswoman for Citizens, Christine Ashburn, says the fact that a property has Chinese drywall does not automatically cancel its coverage, but damage homeowners aren’t willing to fix themselves may disqualify them from policy. Cases are being reviewed on a case by case basis, Ashburn assured.
David Durkee, representing over 300 homeowners with houses using Chinese drywall, is leading the effort to prevent Citizens from dropping their coverage.
“Since homeowners with mortgages are required to have insurance, we’re worried they’ll lose their homes,” says Durkee.
The situation is rather tricky, as these damages are not usually covered by insurers. After Hurricanes Katrina and Wilma, there was dire need for building material, and many properties were built or rebuilt using drywall from China, which was tainted. Since then, some of the contractors responsible for the material have gone out of business, adding additional challenge to where responsibility falls.
Citizens is not eager to continue covering damages they may not have to. In December of last year, a federal judge in New Orleans ruled in favor of 10 insurers refusing to pay claims regarding Chinese drywall damage.