While the number of reported residential Chinese Drywall cases and lawsuits in Ohio remains relatively small, new legislation signed by Louisiana Governor Bobby Jindal this past week will undoubtedly have financial ramifications throughout the entire country. The law, based on Louisiana Senate Bill No. 595, bans insurance companies from dropping the policies of homeowners who have toxic Chinese Drywall in their homes.

The new law, which will be in effect until June 1, 2013, prevents insurance companies from dropping homeowners who find that they have imported Chinese drywall in their homes. The Senate Bill declares that “No insurer shall cancel or fail to renew any homeowners' insurance policy, regardless of whether the policy has been in effect for less than three years, based solely on the presence of installed Chinese drywall in the insured's property or the filing of a claim by an insured that is based on the presence of Chinese drywall which, prior to December 31, 2009, was imported from, or manufactured in, the People's Republic of China. Nothing in this Section shall be construed to allow an insured to avoid its obligations under the terms of the insurance contract.”

The law goes on to read that any insurer violating the provisions of this Section shall be subject to a penalty to be imposed by the commissioner which penalty shall be up to $15,000 (per incident), plus all attorney fees, expenses, and court costs incurred by the homeowner in having the policy reinstated.

It also requires any insurer which has canceled or failed to renew a policy after an insured has made a claim due to the presence of Chinese drywall shall have 30 days from the effective date of the new law to reinstate the policy on the same terms and conditions that applied to the policy prior to the claim or be in violation of the provisions of the mew legislation.

The Consumer Products Safety Commission has received over 3,000 complaints from homeowners across the country complaining that they have Chinese Drywall in their homes. Click the attached link to read what effects Chinese Drywall has on people’s health and damages to their homes.

http://www.restorepro.com/articles/chinese-drywall/59-chinese-drywall-history-assessment-identification-remediation

The new law does not prevent insurance companies from raising premiums on those homeowners, only applies to residential properties, and allows companies to cancel or not renew a policy if the insurance company can find another factor besides Chinese drywall on which to base their decision.

If one of your insured’s believes they may have Chinese Drywall contact us.