A federal judge has ruled that a homeowner’s insurance policy does not have to pay for damages caused by faulty Chinese drywall. With Chinese drywall continuing to be a concern for homeowners, the judge’s ruling could affect how thousands of lawsuits by homeowners will be settled.
The judge based his decision on the exclusion within the homeowner’s policy which excludes damage caused by latent defect, faulty materials, corrosion, and pollution. With this exclusion, the policy would not cover removing or replacing the faulty drywall or any subsequent damages.
Needless to say this decision sets an unfavorable precedent for homeowners.
Source: Insurance Journal
I came across an excellent article that provides new information on the depth of this crisis. However, I believe that the damage estimates on a per house basis may be too low.
“We know that some of the builders are estimating that a minimum remediation will cost at least $75,000 per home with an approximate square footage of 2,000. The cost will go up from there based on square footage and the adequacy of the remediation being suggest.”
“Some observers see this base estimate as extremely conservative, and do not rule out the possibility that a figure twice as big may emerge over time. This possibility cannot be dismissed entirely given the fact that this estimate simply includes materials, fittings and certain items in the home. It does not include health care costs and other expenses incurred by the people living in the homes.”
Source: US Senators Call For Chinese Drywall Probe, Peter J Bown, http://www.atimes.com/atimes/China_Business/KF24Cb01.html
