Chinese Drywall Victims Losing Insurance Coverage October 14, 2009

Can your home insurance company drop you for filing a claim related to Chinese drywall? If you believe the answer to be no, you may want to think again. Two home insurance companies in the state of Florida have begun to do just that.

As more and more people are making claims from damages caused by Chinese drywall, insurance companies are realizing that this has become a big problem for them as well. Not only are many insurance providers fighting these claims, but they are also using the information to provide the evidence needed to drop the homeowner’s coverage.

The largest home insurance company in Florida, Citizens Property Insurance Corp., is one of the two providers in question. They confirmed that many homeowners have been notified that their policies will be dropped if all problems related to Chinese drywall are not solved within six months. This hardly seems fair to the homeowner being that they are not responsible for the Chinese drywall in the first place.

John Kuczwanski, a spokesman for Citizens Property Insurance Corp. said, “Corrosion leads to a likely future claim for a covered peril such as fire or a water leak.” He added that they have not paid for any damages related to Chinese drywall because all policies specifically outline exclusions for builder defects.

Over the next few months expect more and more consumers to complain about their home insurance companies. Along with this, it will be interesting to see how these providers deal with Chinese drywall related claims.