Insurance Blog

Late last week the Consumer Product Safety Commission (CPSC) and the Department of Housing and Urban Development (HUD) recommended homeowners remove all possible problem Chinese drywall from their homes because of health and safety concerns related to emissions of hydrogen sulfide from the material. They also released new information showing that the top 10 reactive sulfur-emitting drywall samples were all produced in China. Certain Chinese samples had emission rates of hydrogen sulfide 100 times greater than non-Chinese drywall samples, the agencies said. A full text of the CPSC and HUD interim remediation guidance is available here. An April 3 Wall Street Journal article notes that the announcement could set the stage for Congress to compensate homeowners who face the expense of gutting their homes and replacing the drywall. However, Florida Senator Bill Nelson was quoted in the article saying: “Now the question is: who pays for it? The way I […]

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A New Orleans federal courtroom will begin hearing an early test case in the Chinese-manufactured drywall products liability litigation today. In the case – Hernandez v. Knauf Gips KG – a New Orleans family contends that Knauf Plasterboard Tianjin Co. Ltd. produced drywall in their home that was “unsafe, defective and inherently dangerous.” The test trial will be heard by U.S. District Judge Eldon Fallon and its focus will be limited to property damage only. The Bradenton Herald notes that the case is among several hundred Chinese drywall lawsuits that have been consolidated into a single proceeding before a federal judge. It says the trial is likely to provide guidance on remediation that will make it easier to resolve future cases. As of February 17, 2010, the U.S. Consumer Product Safety Commission (CPSC) had received 2,941 incident reports related to drywall from 37 states, the District of Columbia, and Puerto Ricko. […]

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A second report from the Consumer Product Safety Commission (CPSC) on Chinese drywall has found “a strong association” between homes with the problem drywall and the levels of hydrogen sulfide and metal corrosion in those homes. However, the findings on possible health effects are less definitive. “While drywall-related corrosion is clearly evident, long term safety effects are still under investigation,” CPSC said. The study of 51 homes also found elevated levels of formaldehyde and hydrogen sulfide, both of which are known irritants at sufficiently high levels. “While hydrogen sulfide and formaldehyde levels detected in homes containing the problem drywall were at concentrations below irritant levels, it is possible that additive or synergistic effects of these and other compounds in the subject homes could cause irritant effects,” the CPSC noted. Over at the Huffington Post, Brian Skoloff cites the Formaldehyde Council, a trade group, saying there is no scientific evidence to […]

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An unexpected piece in the Chinese drywall puzzle has just been uncovered. Florida Insurance Commissioner Kevin McCarty has made clear that in his opinion insurers have no obligation to cover defective Chinese drywall because it is not a covered peril. The Sarasota Herald Tribune reports that at a meeting with state legislators earlier this week, McCarty told them the insurance industry is not responsible for the drywall problem and that ultimately the federal government would have to come up with a funding solution. The November 4 article by Lloyd Dunkelberger quotes McCarty saying: “This is not a covered claim. This is not a covered peril. We need to come up with a plan for a funding source to take care of this.” McCarty described the Chinese drywall issue as a “very, very significant problem,” and stated that the financial responsibility lies with the Chinese drywall manufacturers rather than insurance companies. […]

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A Chinese drywall symposium hosted by the University of Florida College of Engineering will be held in Tampa, Florida on Thursday and Friday (November 5 and 6) of this week. The event will bring together researchers from the primary state and federal agencies to present their findings on technical topics such as materials analysis, emissions testing, exposure assessment and toxicology, remediation and repair. Florida Senator Bill Nelson is scheduled to give the keynote speech on Friday. A preliminary report from the Consumer Product Safety Commission (CPSC) late last week found that while Chinese drywall emits higher levels of sulfur gases and strontium than drywall manufactured in the United States, there is no evidence that the emissions are linked to health problems and metal corrosion. Indoor air testing of 10 homes in Florida and Louisiana was conducted for the study and an analysis of 50 additional homes is underway with the […]

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There have been a number of media stories on the imported drywall (otherwise known as Chinese drywall) issue in recent days. Here’s a quick synopsis. A story in today’s New York Times by Leslie Wayne reports that hundreds of drywall-related lawsuits are piling up in state and federal courts and a consolidated class action is moving forward in Federal District Court in Louisiana that will begin hearing cases in January. Meanwhile, an article in today’s Miami Herald by Beatrice Garcia and Nirvi Shah underscores the point that homeowners are unlikely to find coverage for Chinese drywall issues under homeowners insurance policies because of exclusions for pollution, contamination damage or problems stemming from construction defect. A September 28 article in the Baton Rouge Advocate by Cain Burdeau reported on how Chinese drywall manufacturers may ignore drywall-related lawsuits pending in U.S. courts. A recent report by Swiss Re provides an excellent overview […]

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