Insurers Begin Bailing On Homeowners As Chinese Drywall Complaints Start Clogging Claims Pipeline

In West Palm Beach, Florida, The Associated Press reports:

• 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 — 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 drop policies or send notices of non-renewal based on the presence of the Chinese drywall, will become rampant as insurance companies process the hundreds of claims currently in the pipeline.

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• "This is like the small wave that's out on the horizon that's going to continue to grow and grow until it becomes a tsunami," said Florida attorney David Durkee, who represents hundreds of homeowners who are suing builders, suppliers and manufacturers over the drywall. "This is going to become critical mass very shortly."(1)

For more, see Insurers dropping Chinese drywall policies (Thousands of homeowners nationwide are finding their hopes dashed).

In related stories, see:

• Sarasota Herald Tribune: Nelson blasts firms axing home policies (Senator demands accounting from companies),
• Naples Daily News: Homeowners with toxic drywall learn suing is not easy, or is ability to clean homes,
• WINK News: Couple says home made with defective American drywall.

(1) An inability to obtain insurance on a home used as collateral for a mortgage could constitute a default in the loan agreement, leaving the homeowner under a threat of foreclosure.