Volume 7 Number 9 February 26, 2010

Sean M. ShawChinese Drywall Problems Persist—Time for Florida to Help Floridians

Sean M. Shaw, Esq., Florida Insurance Consumer Advocate

Office of the Insurance Consumer AdvocateIn 2008, Florida became aware of a serious issue that continues to affect many homeowners today - Chinese Drywall. To date, the Consumer Products Safety Commission has received 1,615 complaints about Chinese Drywall, and Florida represents over half of all such complaints filed in the United States. Unfortunately, even though our state was the hardest hit with this issue, state leaders have been slow to respond to this problem wreaking havoc on Florida homeowners.

Currently, the federal government is conducting interagency tests to determine if the presence of Chinese Drywall is causing the many health issues that consumers have reported, as well as the extensive deterioration of personal property located in these homes. The federal government has also conducted trade missions to China in an effort to persuade the Chinese to help finance solutions to the current problem.

However, while all of these plans are in motion, many Floridians have been forced from their homes because of Chinese Drywall. These citizens cannot afford to repair their homes without financial assistance either from their insurance company or the federal government. Consumers also face the prospect of losing their property insurance coverage due to the presence of Chinese Drywall.

Our state legislature seems content to wait for a federal solution to the ever-growing Chinese Drywall problem. Unfortunately, for those consumers affected by Chinese Drywall, a federal solution could possibly take years to reach, and the administration of this solution even longer. Read more.

On a positive note, Senator David Aronberg (D-Greenacres) has introduced a bill to create a Chinese Drywall Taskforce that would set remediation standards and study the health risks of Chinese Drywall. Sen. Aronberg has also introduced bills creating licensing standards for those remediating Chinese Drywall and setting minimum inspection requirements for metal corrosion in homes with Chinese Drywall. While these bills are aimed at helping consumers in the future, I believe that we must do something that will immediately improve the lives of consumers who have already been affected by Chinese Drywall.

In an area where Florida should be setting the standard for citizen protection, Louisiana has taken the lead through several acts by its state government. Under Louisiana law:

“Policyholders who have been covered for more than three years by their homeowner’s insurer have the right to continue their coverage while vacating and remediating their home of defective Chinese Drywall, even if the defective drywall constitutes a “material change in the risk,” as long as the homeowner reports the issue to the insurer.”

Also:

“Notification to your insurance company cannot be used against you and your premiums cannot and will not be raised by your insurer for such a report.”

If enacted in Florida, these protections would relieve consumers’ fears of retaining their property insurance should Chinese Drywall be found in their home. In addition, more people would come forward with Chinese Drywall claims as they would no longer worry about being dropped from their property insurance. This would allow Florida to get the full scope of the Chinese Drywall problem before implementing a solution.

While these policies have critics, it cannot be disputed that these initiatives represent an effort by the Louisiana government to find a solution to the problem of Chinese Drywall –it is time for Florida to do the same. As Florida’s Insurance Consumer Advocate, I believe that our legislators should propose legislation that would provide homeowner’s some protections from losing their insurance coverage due to the presence of Chinese Drywall. While this would not solve the problem of who would pay to fix the damage caused by Chinese Drywall, it would provide some relief to consumers who experience loss to their property for other reasons.

Additionally, I encourage the legislature to create an expedited process for resolving disputes concerning Chinese Drywall liability. Currently, there are several cases being filed by consumers seeking damages relating to Chinese Drywall. The legislature should also create mechanisms that would allow the swift remediation of homes once a solution is reached.

Every possible solution has not been outlined in this editorial; the solutions set forth herein will have as many detractors as supporters. As long as we are working toward some action that will benefit Florida’s citizens who have been affected by Chinese Drywall, I welcome this discussion.

The Insurance Consumer Advocate is appointed by Florida Chief Financial Officer Alex Sink and is committed to finding solutions to insurance issues facing Floridians, calling attention to questionable insurance practices, promoting a viable insurance market responsive to the needs of Florida’s diverse population and assuring that rates are fair and justified.