Home Owners Policy

Not many people in Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Cedar Hill, Duncanville, De Soto, Lancaster, or elsewhere in North Texas have to worry about an issue that some gulf coast residents have to be concerned about. That is the drywall cases that have resulted from hurricane Katrina and hurricane Ike.
The Miami Herald published an article on January 3, 2011. The article is titled, Drywall Insurance Coverage Still Possible.” It was writen by Duane Marseller. Much of the article is quoted here.
The drywall cases are cases that resulted after hurricanes where homes were damaged. When this occurred there were a large number of homes that were repaired using a drywall product that was manufactured in China. It turned out that the drywall product was defective.
The Miami Herald article tells us that a recent court ruling could close the door on home owners insurance coverage of this corrosive drywall product. In spite of this ruling however, there are other, more likely recovery theories still open for the affected home owners.
What happened is, last month a federal judge in New Orleans ruled that ten home insurance companies did not have to pay drywall related claims. These insurance companies had exclusions in the policies that specifically excluded the type of coverage being sought by the home owners.
The ruling was a 50 page opinion on this drywall product. The faulty drywall is said to be corrosive and emits sulfuric gases that damage electrical and air-conditioning components plus causes sore throats and watery eyes.
The ruling by this federal judge is limited in its scope and is based on Louisiana law and applies only to policies in Louisiana, not policies out of the state.
As was pointed out by the home owners attorney in the lawsuit, “Every state has different laws regulating insurance policies and the courts of each state have interpreted those laws differently. The attorney went so far as to compliment the Judge on his ruling, saying that the ruling is narrow in its scope and has a very narrow application to Louisiana home owners policies. Plus the Judge rejected the insurance company’s arguements that the drywall was not causing a physical loss and was not covered because of pollution exclusions.
In his opinion the Judge wrote, “In the present cases, the Chinese manufactured drywall has caused a ‘distinct, demonstrable, physical alteration’ of the plaintiffs’ homes by corroding the silver and copper elements in the homes, often to the point of causing total or partial failure in electrical wiring and devices installed in the homes, as well as by emitting odorous gases.”
This was a victory of sorts for the Louisiana homeowners, but ultimately a loss because of the one exclusion in the policies the Judge found valid. However this victory does help other home owners with different policies without that specific exclusion.
One home owners attorney wrote, “This may indicate courts will find coverage against insurance companies issueing liability policies to builders and suppliers. These insurers have been relying on the ‘pollution exclusion’ when breaking their promises to their insureds.
This ruling helps home owners go after the manufactuers of these drywall products. Another attorney said, “Those commercial policies are a better bet anyway for home owners seeking compensation to replace damaged property and fix their homes.”
Still another attorney said, “That is the recovery source the plaintiffs are primarily looking to. I don’t think the home owner policies ever were looked at as one of the main avenues for recovery.”

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