Insurers Dropping Chinese Drywall Policies

Insurers Dropping Chinese Drywall Policies

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James and Maria Ivory's dreams of a relaxing retirement on Florida's Gulf Coast were put on hold when they discovered their new home had been built with Chinese drywall that emits sulfuric fumes and corrodes pipes. It got worse when they asked their insurer for help — and not only was their claim denied, but they've been told their entire policy won't be renewed.
Thousands of homeowners nationwide who bought new houses constructed from the defective building materials are finding their hopes dashed, their lives in limbo. And experts warn that cases like the Ivorys', in which insurers d

(visit the link for the full news article)


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Edited to fix links




[edit on 10/17/2009 by semperfortis]

So here’s the rub: if your home has Chinese drywall, it looks like insurance companies might reject any claim you make in relation to damage it causes. And further, they might then cancel your policy. No insurance -- mortgage trouble.

Factor in the problem that you’re not going to get far suing the Chinese manufacturers or the Chinese government. Even if you can sue anybody, that could take years. Meanwhile, you have to fix the problem yourself.

I have ask why or how on earth it was possible to import all that “bad” drywall from China? Is there no agency responsible for testing basic components that go into housing to make sure they’re safe? And what will the govt do about this? Yes, they’re looking into it to see what help can be provided to homeowners, but meanwhile, people are losing sleep over this at the very least and possibly even losing their homes -- and that’s without the alleged health problems.

Also, what effect is this going to have on home prices? It can’t help to improve things, that’s for sure!

Finally, does anyone suspect the Chinese government might have been aware of this defect in the drywall they allowed to be shipped to the US? After all, according to AP’s research, we’re talking about half a billion pounds of drywall! It’s unlikely that they didn’t know it was shipped -- well, it’s impossible: you can’t ship that amount of product out of China without the authorities giving the okay!

Now, any theories as to why they might have let this happen?


Insurers Dropping Chinese Drywall Policies
(visit the link for the full news article)


mod edit, fix yahoo link



[edit on 17/10/09 by DontTreadOnMe]

Because the Chinese want us all dead, so they can move in?

Yes, one line. But it says it all...

When people are going to realize that nothing made in China is realiable. Drugs, food, products, nothing!! For the Chinese the word quality dont exist in their disctionary. I rather buy expensive drugs here in the US than buy some cheap generic made in China.

Dont buy China!

As far as insurance complanies dropping their clients, this time Im siding with the insurance company, this is a manufacturer defect, sue the builders, the Chinese or something but definately not something the insurance company will cover.

I am SO glad I got out of drywall cleanup before this cheap, poisonous crap was introduced.

Whether its property development or any other profit-driven enterprise, the cheapest materials/lowest bid will always be sought to maximise that profit over any other concern.

The fault isn't with the defective materials used regardless of whether they are Chinese or imported from any other nation, they were specified by the developer solely to pursue greed.

The fault lies with the US free-market economic system that rewards such minimal cost/maximum profit behaviour in the first place.

Originally posted by Bunch
this is a manufacturer defect, sue the builders, the Chinese or something but definately not something the insurance company will cover.

The defect is directly the responsibility of the architect/development company who specified these materials in the first place, and they who should be sued.

[edit on 17-10-2009 by Taikonaut]

Originally posted by Taikonaut

Originally posted by Bunch
this is a manufacturer defect, sue the builders, the Chinese or something but definately not something the insurance company will cover.

The defect is directly the responsibility of the architect/development company who specified these materials in the first place, and they who should be sued.

[edit on 17-10-2009 by Taikonaut]

I agree with you here, however,

Originally posted by Taikonaut

The fault isn't with the defective materials used regardless of whether they are Chinese or imported from any other nation, they were specified by the developer solely to pursue greed.

The fault lies with the US free-market economic system that rewards such minimal cost/maximum profit behaviour in the first place.

That is not true. The free-market economic system assumes that consumers have full knowledge of the materials that they consume. I can guarantee you that these people did not. The reason I agree with you that it is the builders' responsibility is because when the people sue the builders then, if the builders' were truly unaware of the materials being defective, then they would in turn sue the manufacturers if they could. If they couldn't then they will learn a very serious lesson and not buy from those manufacturers anymore. THAT is a free-market economy... and it WORKS, if allowed to work.

Originally posted by wylekat
Because the Chinese want us all dead, so they can move in?

Yes, one line. But it says it all...

Where the single line is either to the point or amusing I for one have no objections... I would hope the mods would generally agree.

Originally posted by wylekat
I am SO glad I got out of drywall cleanup before this cheap, poisonous crap was introduced.

Good point. It makes me wonder what effect this stuff might have had on the workers who did the drywalling for all those houses that used this toxic stuff. Sheesh, I have friends and their families Stateside who've worked with drywall for years...

reply to post by Bunch


There certainly seems to be a lot of evidence for what you’re saying in respect of Chinese quality -- or rather, the lack of it. After all, half a billion pounds of toxic drywall is no small potatoes. (That's a quarter of a million tons!)

Also have to agree with you about the insurance companies. They’re in the business of protecting policy holders against risks, not dead certainties, and this toxic drywall is a pre-existing defect in the homes that is guaranteed to give many people problems.

The problem is that legal action is going to be a pass-the-hot-potato sort of thing by the looks. There’s no way the Chinese govt is going to cough up millions in compensation.

Originally posted by JustMike
reply to post by Bunch

 

The problem is that legal action is going to be a pass-the-hot-potato sort of thing by the looks. There’s no way the Chinese govt is going to cough up millions in compensation.

Yes, that is the problem facing the specific people involved now, but I can guarantee you that if those people sue the builders, etc... those builders won't ever buy from those companies again.

It might not help with the immediate problem but it will definitely help in the future.

reply to post by Taikonaut


reply to post by Iamonlyhuman


I’ve put both of your responses together into one reply because I follow the arguments you are presenting and pretty much agree. Greed is obviously more important than people’s health in many cases, and taking action against the builders looks like a first recourse.

There is a common assumption among the public that if they buy something in good faith then it should do what it’s supposed to do and any possible risks should be known. That’s why it concerns me that somehow, 250,000 tons of toxic drywall got imported into the USA without anyone “official” apparently either knowing or caring about the consequences, and that makes me wonder if there might be any culpability at the government/departmental level of whatever authority should be ensuring the safety of imported goods.

It also concerns me because I live in a part of the world where we also import huge amounts of mostly low-quality goods from China. It seems that quite often, the consequential problems first get publicized in the USA and then later we over here find out about it. So, now drywall is another item I have to add to my list of things to be suspicious of if they’re sourced from the PRC. That is, assuming I can even find out where our supplies come from. Sometimes there’s no way of knowing.

The other reason I started this thread is that this problem with the drywall is not something that can be fixed by throwing a “TARP” over it. It’s a physically-present toxic substance that happens to form part of thousands of homes. This could major knock-on effects in an already severely damaged US housing market, and what affects the US at any major level eventually has consequences elsewhere.

I also posted because I think the whole thing stinks and if this helps to alert any ATS members who otherwise might not know then it’s worth it. I know what it's like to lose a home in a fire; losing one because of (literally) stinking, imported Chinese drywall would have to be even worse.

If you know of anyone who might be affected please tell them. They should at least be made aware of the risk to their health, their home insurance and even their home ownership.

That’s besides the need for any potential home buyers to know that they could be signing on the dotted line for a potentially uninsurable three- or four-bedroomed health risk with a price that’s bound to go through the floor when the general public really gets to know about this.




[edit on 17/10/09 by JustMike]

reply to post by Iamonlyhuman

I agree that the "once bitten - twice shy" way of learning hard lessons is valid here. All the same, it makes you wonder what other dangerous or even deadly garbage has also been imported from who-knows-where to save a dime (or a Euro cent), and that we are yet to find out about -- if we ever do before it's too late.

Then of course we'll have other gung-ho entrepreneurs in the future who didn't get caught in this mess but might get taken down by the next one.

Meanwhile, what do you think this will do to liability insurance for builders, or just for the building industry in general? They're having trouble selling new homes now, and this is not going to help matters one little bit.

Do we know for sure that this toxic stuff is not still being imported by any country? Or that whatever might still be stockpiled is not going to be used? And what about the unsuspecting Chinese people themselves -- the ordinary people who have no idea about this and are doubtless using this stuff as well?

Hmmm...and how to dispose of this stuff? It's not possible to just dump it in landfill. (And what about all the offcuts that did get dumped in landfill already?)

What will the Chinese do? Nothing? A few show trials, prison terms and executions like they did for the poisoned baby formula scandal? Do they hope we won't find out about all the other toxic "products" they're sending all over the world? Okay, that last is an assumption that may be unwarranted but their behavior has been most uncool.

These questions were not just for you, Iamonlyhuman, but all the same I'd appreciate your thoughts along with those of other posters.

Best regards and thank you to all members who have responded. Remember -- number one priority is to inform any friends or family who have new homes with drywall -- just in case it's Chinese.



[edit on 17/10/09 by JustMike]

reply to post by JustMike


Not only inform family members and friends but also put it on your "things to ask" a mortgage broker before buying or even renting a place in the future.

reply to post by Bunch

That's an excellent point! (Star for your post. )

Yes, this is not just about now, it's potentially going to be a problem years into the future. And as insurance companies can cancel a home policy or refuse insurance if the place has toxic drywall, it has potential to cause financial distress to the most innocent and unwary, hardworking people who just want to rent or buy their own place.

My question is this. Who gets paid to take out the old crap and put in new dry-wall?

I'll add more to this once i get a good answer. Im going somewhere with this, i have an idea.

reply to post by Lichter daraus

Hi Lichter, good question. Frankly I don't know what the methodology is but it would have to be people who are trained in handling HazMat collection and disposal. And that means...Hmmm... I think I see where you might be going with this. Very sharp. I hadn't thought of that angle.

Be good to see what others say or what you might be able to add, though.

Another Hmmm... Any chance they could ship all the removed toxic drywall back to China?

Another question: what about government buildings? I don't only mean houses (though the govt owns many of course, especially for military and govt workers to use), but also offices and so on? Any that have been built or refitted in the past few years would also have to be checked. That is, they ought to be.

Originally posted by Taikonaut

Originally posted by Bunch
this is a manufacturer defect, sue the builders, the Chinese or something but definately not something the insurance company will cover.

The defect is directly the responsibility of the architect/development company who specified these materials in the first place, and they who should be sued.

Actually this sort of thing is routinely covered by insurance companies!

You buy a new supply line for your tiolet or for your washing machine, a week later it breaks and floods your house, the insurance company WILL pay to dry your home out and repair the damage even though it was due to a DEFECTIVE, brand new part/product!

But what most people don't know is that the insurance company will subrogate against the company that makes the part/product.

SUBROGATE

subrogate - substitute one creditor for another, as in the case where an insurance company sues the person who caused an accident for the insured

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!

reply to post by Keyhole


Thanks for pointing that out, then I think the only reason why a insurance company will deny the claim and drop the client altogether is because they know the chances of getting some money back from China are slim to none.

reply to post by Keyhole

You make a good point in respect of the use of subrogation and thank you for mentioning it ; I feel however that this matter of the toxic drywall might be viewed slightly differently to the example you gave of a failure of an item like a dishwasher and damage consequential to it. The insurance companies' argument seems to be that it's like a fault in a new car: we should seek repair/financial redress from the manufacturer and not from our car's insurer if there is a manufacturing defect. They do have a point, of course, and legally they probably have it right -- even though from my perspective it's almost exactly the same as you mentioned, it's apparently a tad different. But I ain't a lawyer.

However I must point out that I agree with what you say, that in principle, the insurance companies could and perhaps morally should pay out the claims and then take legal action to recover from the manufacturer (or supplier or even builder), but as another poster mentioned ultimately this could devolve back to China and the chances of recovery are almost nil. So, the insurers are taking the easy way out in one respect, with morality and maintaining faith with their customers being low on their list -- or so it seems to me.

Whichever way we cut it, this whole thing could become quite a mess and create still more misery for many home owners.

Then there is another wrinkle: I would guess that there may be whole housing developments that have been built using this toxic drywall. In such a case, as there is a risk to health, people in these developments might want to move out. Where will they go? What happens to the home in the meanwhile,and what happens to the property values of nearby homes?

And what if govt authorities get involved and decide as a matter of public safety that these people have to move out?


[edit on 17/10/09 by JustMike]

Originally posted by JustMike
reply to post by Lichter daraus

 

Hi Lichter, good question. Frankly I don't know what the methodology is but it would have to be people who are trained in handling HazMat collection and disposal. And that means...Hmmm... I think I see where you might be going with this. Very sharp. I hadn't thought of that angle.

I think you know where I'm going. So let say, maybe, just maybe, there is some ties with a company trained in the removal of toxic crap. Maybe the company that built all these houses also own such a busness...Hmmmm...what a great way to make more money. To me it all boils down to greed, but it might not be. Ill come up with more as i ponder this.
Deep down i think I'm a bit of a conspiracy theorist...

[edit on 07/16/2009 by Lichter daraus]

[edit on 07/16/2009 by Lichter daraus]