Louisiana Bill Would Ban Insurers from Penalizing for Chinese Drywall

By Jim Greene

Published on May 21, 2010

A bill to prevent insurance companies from dropping coverage or raising rates for home and business owners whose property contains Chinese drywall was recently approved unanimously by the Louisiana State Senate Insurance Committee. The bill will now go to the Louisiana House of Representatives Insurance Committee.

State Sen. Julie Mills, the bill's sponsor, said action was needed to keep property owners from losing their insurance coverage, without which a mortgage can be cancelled. Mills said she has received complaints from constituents who have had policies cancelled or not renewed or have had premiums or other charges increased.

Insurance Industry Says Coverage for All Would Rise

Insurance industry lobbyists said the legislation, if passed, would violate existing insurance contracts and force a statewide increase in insurance rates.

''If you can't adjust your premiums to a particular risk, you're going to ... have to spread that risk to everyone else,'' said Chuck McMains of the Property and Casualty Insurers Association.

Arguments in more than 2,100 defective product lawsuits filed against those who make, ship, distribute, and build with Chinese drywall claim it gives off toxic fumes, including sulfur dioxide, causing corrosion of air-conditioning system components, electrical wiring, plumbing, and personal items, such as metal jewelry. Contamination has also been blamed for health problems, particularly of the respiratory system.

Chinese Drywall Made with Toxic Coal-Burning Byproduct

The culprit in Chinese drywall is fly ash, an ingredient recovered from the exhaust of coal-burning power plants. The potentially toxic substances found in coal are highly concentrated in fly ash.

Chinese drywall was imported heavily in the last decade because domestic supplies were inadequate to meet the demands of the housing boom and, in the Southeast, the rebuilding efforts after two major hurricanes.

If you or someone you know has suffered property damage or health issues because of Chinese drywall, or has had your insurance cancelled or your rates increased, contact an experienced attorney. Plaintiffs in several important cases have received financial compensation and you may be eligible to do the same.

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