“The property loss from Chinese drywall could exceed every U.S. hurricane except Katrina and Andrew”.
The complaints received by the Consumer Products Safety Commission show that the impact of Chinese drywall will be widespread. Between 2004-2006, an estimated 500 million pounds of tainted drywall came into the United States. It is quite possible that the tainted drywall is now in more than 100,000 homes. The tainted drywall supplies have affected all but 12 states, with the greatest problems occurring in Florida, Louisiana, Mississippi, Alabama, and Virginia.
“Based on $80 per square foot (the lowest cost from the verdicts made public) in 100,000 homes with an average of 2,200 square feet per house, the loss would be $18 billion in property damage”.
The damaging health effects of having to live with the drywall have not been discussed, but the potential for property damage/claims alone are catastrophic.
Source: http://www.iiaba.net/IAMag/NewsViews/052010.html
According to a January 14 edition of Insurance Journal Magazine, dramatic increases or decreases in residential and commercial building activity growth could trigger a rise in construction defect or Workers’ Compensation claims.
States that are noted to be in the danger zone for underwriters based on dramatic decreases in contruction activity growth include NJ, KY, LA, FL, and MS.
While the article does not speculate the reasons for such increased losses due to changes in growth, two common reasons are most often cited by other experts. A rapid increase in construction growth is normally associated with an increase in construction defect claims due to an influx of inexperienced contractors in the market. A rapid decrease in construction growth is normally associated with an increase in Workers’ Compensation claims because workers often become disgruntled due to layoffs or cut backs and file Workers’ Compensation claims in retaliation as a way to make up for income loss.
