Drywall Coverage in Louisiana a Sticky Situation

Recent news of problematic drywall from China that is contaminating properties has driven Louisiana Commissioner of Insurance Jim Donelon to hold a press conference to clear up some information regarding insurers.

Results from an indoor air study of 51 homes along with initial reports from two studies of corrosion in homes with Chinese drywall confirm that there is a strong association between homes with the problem drywall and the levels of hydrogen sulfide in those homes and corrosion of metals in those homes.

Donelon said some insurance companies are canceling policyholders, citing vacancy or failure to maintain the home in insurable condition. But Donelon assures policyholders they protected by a consumer protection law unique to Louisiana. Policyholders who have been covered for more than three years by their homeowners’ 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.

“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,” Donelon tells consumers. “I am here to make sure that insurance companies do the right thing and abide by our state’s three-year protection rule and all other consumer protection laws on our books.”

 

 

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