Citizens Property Insurance, a state backed insurance company, is about to cancel the homeowners policies of customers whose homes were built with tainted Chinese drywall. This controversial decision will affect hundreds of homeowners across the state of Florida. It makes me wonder if insurance companies from other states, who also have customers with tainted drywall, will decide to drop their customers as well.
Homeowners insurance is supposed to cover the cost of replacing or repairing damages that occur to the actual structure of your home. This includes the home itself, the plumbing, heating, electrical wiring, air conditioning, built in appliances, and everything else. Another part of a typical homeowners insurance policy covers “loss of use”. This means that if something happens that makes your home unlivable, the insurance company is supposed to pay for the cost of the hotel you temporarily move to, as well as the cost of food, and other living expenses, for the time it takes your home to be repaired.
There were a lot of homes in Florida, as well as in some other states, that were manufactured with a drywall that was made in China. People who bought these homes and began living in them soon noticed a very strong smell that resembled rotten eggs. Homeowners were getting sick, and were unable to become well. Illnesses included upper respiratory issues, earaches, sore throats, dizziness, headaches, nosebleeds, rashes, and other health problems. It turned out that the Chinese drywall was the cause.
This tainted drywall gave off a sulfur-like odor from the volatile sulfur compounds in the drywall when the drywall was exposed to heat or moisture. Florida is a state that has weather that includes high temperatures, and high humidity. The vapors produced were causing corrosion on the copper wiring, air conditioners, and other parts of the homes, as well. Clearly, these homes were unlivable.
Citizens Property Insurance has begun sending letters to hundreds of it’s customers who homes have the tainted drywall in them. The letters state that their homeowners insurance will be dropped. Citizens Property Insurance is backed by the state of Florida, and is intended to be a last resort for people who cannot get approved for homeowners insurance from a private insurance company. This is not the first time that Citizens Property Insurance has done this, either.
Personally, I cannot understand how it would be legal for Citizens Property Insurance to suddenly drop hundreds of customers like this. I thought that the only reasons why an insurance company could cancel a policy, or refuse to pay out on one, was either because the customer committed insurance fraud, or because the customer had stopped paying the premiums. Where does this leave the people who got stuck with homes full of tainted drywall? It’s not their fault this happened.
Image by Claus Rebler on Flickr