A Louisiana bill would ban insurance cancellations due to the Chinese Drywall problem

Last year, Vacant Home Insurance Now reported on a problem homeowners were having with "bad" and corrosive drywall used after Hurricane Katrina. In summary, insurance companies did not want to touch any homes not just vacant houses, with this problem and homeowners were left out in the cold and had to spend thousands to replace the drywall before they could again seek insurance.

A prohibition against insurance companies dropping coverage for dwellings that contain corrosive, Chinese drywall moved forward Wednesday in the Louisiana Senate. Again, this pertains to any form of homeowners insurance not just vacant homeowners insurance in Louisiana.

The bill would stop property insurers from canceling, refusing to renew, or increasing premiums or deductibles because of Chinese drywall at a property. People who rebuilt their homes after Hurricane Katrina claim the imported drywall emits sulfur, methane and other chemical compounds that have ruined homes and appliances and harmed residents' health. The contaminated wallboard is costly to replace.

The bill only deals with drywall that was imported from or manufactured in China before Dec. 31, 2009. Anyone found in violation would face a penalty up to half the insured value of the home or property, plus all court costs and attorney fees. It is still unclear if insurance companies that quote vacant home insurance can still use "Chinese Drywall, as a reason to not quote vacant homeowners insurance.

Chinese Drywall Causing Vacant Homes

Homeowners that have the now infamous Chinese Drywall exposure problem will need vacant homeowners insurance while they are not living in the house, and while the situation is fixed. However, securing vacant home insurance for this situation is not easy, and many carriers will not provide vacant home insurance quotes for homeowners in this situation.

There have been problems reported with certain Chinese drywall shipped into the United States. It is said to emit some sort of gas or odor that can cause health problems for the owner of the home. It all started after hurricane Katrina where, because of the extent of the damage, there was a drywall shortage in the U.S. and drywall had to be shipped over from China. It's unclear if the problem has totally been corrected, and if existing drywall coming from China could contain the same toxic element. The main symptom is a sulfur-like smell and certain respiratory problems that cannot be explained.

People who experience this problem may be forced out of their house, thus they will need vacant homeowners insurance. However, carriers that supply vacant home insurance are fearful of the Chinese drywall problem and many will not provide vacant home insurance coverage.

Also if extensive renovations are anticipated, like ripping out all of the drywall to replace it, many vacant home insurance carriers will not provide coverage, and a builders risk, or contractors policy will be needed.