Bill Introduced to Protect Homeowners from Losing Insurance over Chinese Drywall

By Jim Greene

Published on November 23, 2009

A bill intended to protect homeowners from loss of, or changes to, insurance coverage because of defective Chinese drywall in their homes has been introduced in Congress by a representative from Louisiana, a state heavily affected by the issue.

Rep. Charlie Melancon, D-La., introduced the proposed Drywall Victim Insurance Protection Act in response to reports that some insurers have dropped or not renewed coverage and others are considering similar actions. The insurers are claiming the action is justified under defective construction exclusions.

Chinese drywall is known to emit sulfur dioxide and other fumes and to contain elevated levels of strontium and other heavy metals. Thousands of complaints have been filed with the U.S. Consumer Products Safety Commission and several state agencies, claiming Chinese drywall causes corrosion of air-conditioning system components, electrical wiring, and water pipes, as well as a variety of health problems.

An attorney who represents alleged victims of Chinese drywall damage said the bill would be difficult to pass and an insurance industry representative said that, if passed, it would have little effect. Both based their predictions on the fact that insurance is regulated by the states, not by the federal government.

Despite criticism of the four-page bill's potential, others, including U.S. Sen. Bill Nelson, D-Fla., see it as valuable for bringing attention to the Chinese drywall issue.

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