Insurers Dropping Chinese Drywall Policies

Originally posted by ANNED
The biggest problem with china is counterfeit parts.
Every thing from nut and bolts to electrical circuit breakers.
www.counterfeitscankill.com...

Too busy to comment on tis now. Just closed down a business in an industry destroyed by Chinese knock-offs.

For every dupe and fake you hear about, there are 10 undetected. Whatever country you're in, you may be spending counterfeit currency.

Trademark, patent and copyright laws do not exist in China. There may be a confrontation over this, as creative properties and software increasingly become components of Western economies.

But the Pandora's Box has been opened.


Mike (note my name is TM)





[edit on 26-10-2009 by mmiichael]

Hi Mike,

that situation of having no respect for patents or copyrights also existed here (where I live) under the old, Communist regime. For example, they thought nothing of taking the latest hit songs from "the West", adding Czech lyrics and then recording the song with almost identical production and selling it as if it were entirely a local product.

This is the way Communist regimes typically operate. They take whatever they want that was produced by the hard work of others outside their own system and then pretend it's all their own idea.

This is what China does every day of the week. They blatantly steal technology. Yes, they also do their own r&d and produce some amazing stuff (like hi-tech batteries for automobiles for example), but a lot of the "everyday" products they produce are based upon stolen intellectual property. If we buy these products, then the real inventors don't get a dime in royalties.

As we all know, anyone from the West has almost no hope of finding redress for damages via Chinese courts, whether it's for stolen intellectual property or actual damage caused by their toxic or defective products.

A few minutes ago there was an anouncement on CNN international that they'd be reporting on how the Chinese govt would be cooperating with US authorities over defective Chinese drywall, which some homeowners "claimed" gave off toxic fumes.

Yeah. "Claimed."

Even the way it was announced suggested "Oh come on -- chuckle chuckle -- this is nothing serious, is it?"

I've just been searching the CNN site and can find not a word about today's story. Anyone find it or managed to get a copy of something that actually aired?

Or did it get pulled? Now, don't get me wrong, folks... I'm not suggesting that "honest reporting" CNN would pull a story about the Chinese offloading 250,000 tons of toxic drywall onto the US, even continuing to do so after the Dept of Health in Florida publicly stated it was toxic -- after waiting three months to inform the public of what they knew... Nope, I'm not suggesting that at all...

If someone can find this latest story on CNN please post a link. Thanks!

About your name, Mike... Now okay, while you may have it trademarked, I happen to have a (ahem!) similar one. Sure, it looks identical to yours but...

By the way, if you type your own comments after the closing "quote" then it's easier to follow.

Mike

[edit on 26/10/09 by JustMike]

Originally posted by Keyhole

So, being Chinese drywall IS a defective product, the insurance companies, I feel, should pay for the damage it has caused and for its removal and subrogate against the manufacturer!

And this is the problem with globalization. How do you get at the original manufacturer?

Thomas PM Barnett ('The Pentagons New Map' author) has this to say:

Naturally, China’s deep penetration of the U.S. market has raised product-safety issues. Any economy that is growing as fast as China’s cuts plenty of corners. But realize that China learns by scandals just as America did over the past century. Frankly, the best crises are the ones you actually hear about, because that means the international press got ahold of them, and those already affected or at risk will get the information they need to protect themselves. Once tracked back to China, Beijing is put on public notice that whatever laxness exists simply cannot be tolerated anymore, with threats of quarantine, bans on exports, cessation of investment flows, and so on.

A generation ago, such threats would elicit yawns from China’s ruling elite, but now, with the Communist Party’s legitimacy riding on economic expansion, they’re taken with the utmost seriousness. In short, China’s government is starting to act more like a business which recognizes that its reputation is often its most important asset, because fierce competition means that today’s mistake allows somebody else to steal your customers by the start of business tomorrow.

www.good.is...

Mike,

I'll allow you to use my TM name on this forum. I usually charge ten cents per usage.

I know the old Communist world pretty well. Even studied Russian in University. Yes ripping off Western developed technology and entertainment product was a byproduct of the system there, probably still is. I remember Disney was threatening to disallow their products somewhere, - Poland, I think - because the government refused to crack down on international copyright anf TM agreements.

Tough economics and the lack of enforcement encourages this kind of thing. It goes on everywhere, of course. In China it's a significant portion of the booming economy. But we can't really jump down the throat of the Chinese too much. It's not part of their culture and it's endemic to Asia and anywhere else were conditions are favourable.

An interesting thing I was told about in the music recording business, they lowered the price of their products to a point where it became economically unviable to do knockoffs. Something like a legitimate recording selling for the the same or not much more than than the inferior copy.

China does have a lot of talent and we can only hope the energy will go towards original competing goods. But of course they lack still the marketing savvy and budgets. But thing can change.

Of interest to me is the inroads they are making with the Internet. They have a presence but I see very little overtly Chinese sites.


Mike

Originally posted by Keyhole

So, being Chinese drywall IS a defective product, the insurance companies, I feel, should pay for the damage it has caused and for its removal and subrogate against the manufacturer!

WHAT? No way. That would bankrupt the insurance companies and cause ALL of our rates to go up. People affected by this need to go to the home builders. New homes DO come with warranties.

caveat emptor

reply to post by Aggie Man


the problem with that logic is that when a contractor screws up they have insurance which means it goes thru an insurance company anyway- that is why we pay exorbitant rates for insurance.
now if it can be proved a contractor negligently used a defective or dangerous product then yes it should be said contractors problem and they be sued. but the insurances companies still have to pay to defend themselves to prove it is not their fault. it is a viscious cycle and usually takes years to resolve

Originally posted by Keyhole

So, being Chinese drywall IS a defective product, the insurance companies, I feel, should pay for the damage it has caused and for its removal and subrogate against the manufacturer!

That makes no sense to me at all. Why not sue the original manufacturer, they are the ones who screwed up, not the contractor or the insurance company.

I don't think contractors intentionally bought this drywall, knowing it would cause such problems. They just went with the cheapest product.

Blame either the Chinese manufacturer or the any U.S. Governmental agency that should have been testing those materials.

I guess it really boils down to "you get what you pay for".

Lets put it this way, would you like to live next to an American built nuclear plant that cost 2 Billion or would you rather live next to a Chinese built one for 900 Million?

Originally posted by pavil

Originally posted by Keyhole

So, being Chinese drywall IS a defective product, the insurance companies, I feel, should pay for the damage it has caused and for its removal and subrogate against the manufacturer!

That makes no sense to me at all. Why not sue the original manufacturer, they are the ones who screwed up, not the contractor or the insurance company.

I don't think contractors intentionally bought this drywall, knowing it would cause such problems. They just went with the cheapest product.

Blame either the Chinese manufacturer or the any U.S. Governmental agency that should have been testing those materials.

I guess it really boils down to "you get what you pay for".

Lets put it this way, would you like to live next to an American built nuclear plant that cost 2 Billion or would you rather live next to a Chinese built one for 900 Million?

Except ....

How do you sue a chinese manufacturer?

You sue who you can.

reply to post by centurion1211


Yes, I know. That is part of the problem. Unfair trade.

China gets to pirate and steal patents, artificially maniupulate the Yuan, and produce some of the crappiest products around yet no one will call them out on it.


I am all for Free Trade as long as it is FAIR TRADE. Right now we are being taken advantage of, granted some of it is our own doing.



[edit on 26-10-2009 by pavil]

Originally posted by bigfoot1212
reply to post by Aggie Man

 

the problem with that logic is that when a contractor screws up they have insurance which means it goes thru an insurance company anyway- that is why we pay exorbitant rates for insurance.
now if it can be proved a contractor negligently used a defective or dangerous product then yes it should be said contractors problem and they be sued. but the insurances companies still have to pay to defend themselves to prove it is not their fault. it is a viscious cycle and usually takes years to resolve

Yes, I know. I work in insurance. That's why I avoid subrogation. BUT, it's not the insurance problem.

EDIT: I wanted to mention that it may still get paid through an insurance company, but those are 2 different types of insurance. It's not fair to ask Homeowners insurance to pay for something a Commercial insurance policy must cover. That way, the business (contractor) owner's insurance premiums see any increase, not the home owner's. Now that seems only fair...and it's the law (policy language).

[edit on 26-10-2009 by Aggie Man]

reply to post by pavil


you are right- you get what you pay for. but people always want the cheapest thing they can get and that is the problem.
i hate to use the term "being jewish" but that is what people are anymore- get the cheapest now and get mad later when the product sucks and claim it isn't their fault for buying #ty goods so they can sue someone and hopefully make a quick buck.
this has been reiterated all thru this thread.

reply to post by bigfoot1212



Hopefully all of this economic chaos will end up with us buying less junk, and giving some thought to quality when we purchase things.

I won't hold my breath though, I have to go shop at Walmart...............

reply to post by pavil


it won't end up with thesheeple buying less junk- they will still "be jewish" so they can complain but won't do anything about it. if they were to actually sit back and crunch the numbers they would realize what they spend now will actually save them money in the long run.
i know not many people have much money to spend in this economy(i don't either) but if you spend a few extra bucks and get quality you will spend less in the long run and be happier- but noone thinks that way
and btw i avoid walmart like the swine flu vaccine lol

With the economic meltdown there are huge inventories in warehouses in the West and in source countries. Selling off at distressed prices has become a norm. It will still take a long time before this build-up, billions of dollars worth of goods, passes through the system.

This has affected the Chinese more than they want to admit. Order levels halved from their peaks. Their own unsold product is competing with their newly produced stuff.

Central government subsidized financing of the growing manufacturing sector was based on loan repayments and profits that are not materializing now. Beijing is stretched to the limit. Something's got to give. The system is far closer to collapse than most realize.

Historically one can expect extreme policies and aggressive international responses.


Mike

An ex financial adviser I know mentioned that "Christmas is already in transit." Meaning that the inventory and gee-dunk we are gonna buy is already on it's way... for inventory and such. So....

(and I can't remember where I snagged this from... might have been off of Market Watch)

Alarm bells are ringing for liner firms as one of the most accurate gauges of the container index fell for the first time in more than four months Friday. The China Containerised Freight Index, operated by the Shanghai Shipping Index, dropped for the first time since early June today. Despite lines reporting increased volumes and some being successful with rate increases this news will be a hammer blow for the industry. The CCFI takes data from the leading 20 lines operating out of China. Its numbers have been consistently in line with the fortunes of the container sector over the years, especially since China accounts for one in two boxes moved. With container shipping often a precursor of the world economy, the drop in the CCFI has some analysts suggesting the global economy could be in for a nasty double dip recession.

[edit on 27-10-2009 by RoofMonkey]

I used to be in the construction and restoration business for many years and can tell you guys first hand that the most of the builders that used this stuff knew exactly what they were getting themselves into. I had the opportunity to buy the drywall in question many times. When you purchase materials from reputable sources you get data/spec sheets that let you know of all the raw materials in that product and the last lot that was inspected for quality. This cheap chinese drywall was peddled for a long time by sub par suppliers and was sold without these specs, you could buy this stuff for about $2 a sheet if I remember correctly. Anyone in the business would know that when you purchase materials without specs and test assesments you're buying crap. I agree with the insurance companies not covering the bad materials, home owners policy come in three types ho-3 ho-5 and I believe ho-8. all three templates have at minimum an exclusion for material failure and sub par building materials, I personally think the builders need to be held accountable, the chinese just do what we ask. If there wouldn't have been a market for the stuff they wouldn't have supplied it. This is just another example of builders trying to save a buck at the homeowners expense.

capitalist pigs. there's soon going to be no such thing as insurance anymore. the trend seems to be to wiggle out of all they can now, and it's only going to get worse in the near future. just another way of milking the poor schlubs for every last penny. i'm really sorry we keep bailing them out, aren't you?

[edit on 27-10-2009 by ~Lucidity]

Sorry I've not been responding so much the past day or so. I read the posts but you all are doing a better job of replying to each other's points than I think I could so I kept quiet.

However there's a couple of points I'll refer to just briefly:

It's true that Chinese authorities do take at least some action these days when there is a big-enough stink. They recognize that they aren't the only ones in the world who can knock out zillions of cheap products. But on the other hand, they are by far the biggest and there is nothing that is going to change that. They have the population and massive resources, and even those they lack (like oil) they have sourced by deals going well into the future. So, while they will take action here and there, it's like picking a few fleas off a camel. Plenty more will jump on for the ride and short of a thorough dunking you'll never catch all of them.

The insurance companies are in a bit of bind in some cases. A lot depends on their policies' legal wording. They can't just pay out for things that aren't covered as their shareholders will scream blue murder for giving away their dividends on profits. How-ev-errrr... if their policies' wording shows that they should cover these events, then they ought to pay, even if they need to go to subrogate action on these claims, namely pay the homeowners and then try and recover from the builder/supplier/manufacturer/whoever they can grab and haul into court. It's a mess and it won't be fixed in a hurry. Not legally and not literally in terms of the damaged homes and other real estate.

Mike

reply to post by funkeemunkee84


Thanks for the reply, I was under the assumption that they didn't know it was that crappy. If they still purchased it, knowing to be untested, substandard and very likely inferior/dangerous then that put some of the onus on them.