Many Insurers Deny Home Insurance Claims in Defective Chinese Drywall Debacle – What Can Orange County, California Victims Do?

Homeowners throughout the United States recently discovered some terrible news lurking in the walls of their homes; their homebuilders had used what turned out to be >>defective drywall http://www.miamiherald.com/2009/10/07/1271892/homeowners-could-lose-insurance.html<<when building their homes. The drywall, which had been imported from China to the United States in mass quantities around 2004 and 2005, has been reported to cause a pervasive rotten egg smell, corrosion of any and all metal within the home, and a host of health problems.

Many homeowners were shocked when their claims were denied by their home insurance providers on the grounds that they don’t cover contamination or building product defects. And many of those same home owners were even more shocked when their insurance providers then dropped their property insurance coverage all together, because their insurance policy cannot be renewed until after the homeowner can prove that the drywall issue has been repaired. Some builders have estimated the cost of repairing Chinese drywall damage to run nearly a third of the original cost of building the home.

Swiss Re issued a report on the problem that concluded most insurers are denying defective drywall claims on the grounds that they do not cover “pollution or contamination damage or problems stemming from defects in building materials.” That leaves homeowners to go after builders, drywall suppliers and manufacturers to cover the cost of repairing the damage. It remains to be seen if those parties’ damages will be covered by their respective insurance policies either.

According to insurancenewsnet.com, “homebuilders, homeowners and commercial contractors are in limbo whether damage caused by the tainted drywall and its removal will be covered by their respective insurers. In nearly all cases involving Chinese drywall, experts say a court’s decision will vary by state and, in some cases, by jurisdiction within that state.”

As a litigation firm with a national reputation for aggressively litigating and consistently winning complex multi-million dollar cases, Callahan & Blain has developed an expertise in going after the insurance companies – and making them pay. In a similar case, our attorneys were able to obtain $800,000 in coverage for a client who had been >>denied coverage for claims http://www.callahan-law.com/verdicts-settlements/insurance-northridge/index.html<<

arising from the Northridge earthquakes.

If your insurance claim has been denied, contact the lawyers of Callahan& Blaine for expert legal assistance.

Jake Gosselin