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Insurer Canceling Policies on Defective Chinese Drywall Homes

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Punta Gorda, FLHomeowners who face problems with Chinese drywall received more bad news: the public insurance company in Florida has said it will suspend policies on homes with extensive Chinese drywall problems. For homeowners already suffering health problems and financial troubles because of the defective Chinese drywall, the announcement is another blow.

According to The Miami Herald (01/18/11), Citizens Property Insurance Corp., a state-backed insurer, has sent notices to some homeowners notifying them that coverage will be cancelled in homes that have extensive damage caused by defective drywall. The Herald notes that Citizens Property Insurance Corp. informed policyholders in 2009 about the decision to cancel coverage, but appeared to reverse the decision because of bad publicity regarding the cancellations.

Homes in which the damage caused by defective Chinese drywall is not extensive may still be able to keep the insurance coverage.

The defective Chinese drywall can cause extensive damage in homes, including causing metal to corrode and electrical problems. Some homeowners say they have suffered health problems because of the defective drywall, including bleeding noses and respiratory problems. The drywall also reportedly gives off a noxious smell.

Homeowners could pay up to $150,000 to have their homes repaired. Some have chosen to try to repair their homes themselves, taking months to remove the defective drywall, heating and air conditioning vents, insulation, plumbing and wiring, and replace them. Even doing the job alone, however, could cost tens of thousands of dollars in materials. All this to repair homes that initially cost up to $450,000 to buy.

Some homeowners have been forced to abandon their homes.

Homes across the US were made with the Chinese drywall in the mid-2000s because US-made drywall was scarce. The Chinese drywall reportedly emits hydrogen sulfide and other gases and can cause corrosion in air condition coils and electrical wiring.

Meanwhile, the makers of some of the defective Chinese drywall have reportedly ignored US lawsuits and refused to help homeowners repair their homes. One company, Knauf Plasterboard Tianjin, started a pilot program to repair homes, but that program does not help homeowners with drywall from other companies, the Sun-Sentinel (01/10/11) reports.

The problem extends to homes built by Habitat for Humanity, which is reportedly paying $8 million to repair Habitat homes in the New Orleans area. A WWL-TV report (01/05/11) notes that of 350 homes built in the area by Habitat for Humanity since Hurricane Katrina, 165 tested positive for defective Chinese drywall. So far, 28 have been repaired, with 72 more in progress.

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