During the recent housing boom of the early 2000s, the Chinese imported over 250,000 tons of drywall to America. Chinese drywall was abundant and cheaper than American drywall, and builders willingly used it in residential and commercial construction. Experts estimate the Chinese product was used in over 100,000 homes and businesses in America.
Much of the importing occurred between 2004 and 2008, as a drywall shortage occurred due to the multiple hurricanes that struck the Gulf Coast states. Consequently, most of the product complaints are coming from building owners in the Southeast and Gulf Coast states.
American drywall is made of gypsum, a mineral mined throughout the world for millennia. It is water soluble and used for drywall and plaster as well as other uses. Chinese drywall is made of fly ash, a waste by-product of burning coal.
Recently, homeowners are reporting that the Chinese wallboard gives off fumes that corrodes copper pipes, blackens silver jewelry and causes health problems for people living near it.
The source of the reactions has not been nailed down (pardon the pun). It could be the fumigants sprayed on the drywall in the manufacturing process. It could be a chemical reaction with the fly ash, its base ingredient. But homeowners complain that the drywall gives off noxious sulfur-smelling fumes that are damaging the homes and causing sickness for their families.
Homeowners and businesses are lining up to file lawsuits against manufacturers, suppliers and builders, claiming damages for both property damage and bodily injury.
Builders are also filing lawsuits against manufacturers and suppliers, stating that they did not know that the building material was inherently defective.
So, the property damages occur when property owners have to remove the Chinese drywall and repair or replace other property damaged by the fumes. Losses also occur when people are unable to continue living in a contaminated dwelling. Bodily injury losses occur when people are sickened and seek medical treatment.
But are the damages covered by property insurance?
No, they are not. A homeowners policy specifically excludes coverage for “faulty, inadequate or defective…materials used in repair, construction, renovation or remodeling.” In a commercial policy, coverage is excluded for “latent defect or a quality in property that causes it to damage or destroy itself.”
Those exclusions are for “first party” coverage, meaning you insuring property you own. But manufacturers, suppliers and builders are wide open for claims on their Products & Completed Operations Liability coverages.
Your strategy is to check to see if the drywall you used is Chinese drywall. Then, carefully document your damages for property damage and bodily injury damage. Then, contact a Personal Injury attorney to explore your options for recovery.