Fla. insurer renews policy despite Chinese drywall

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Source: Ap

WEST PALM BEACH, Fla. – Florida's public insurance company reversed course this week and said it will cover a couple's Gulf Coast retirement home, after previously telling the homeowners their policy wouldn't be renewed because of the home's tainted Chinese drywall.

Citizens Property Insurance Corp., a state-backed insurer of last resort, told The Associated Press for an Oct. 15 story that it generally couldn't continue to cover homes with such defective materials because of a "pollution" exclusion in policies.

"Without walking into a courtroom, this is one of my most proudest victories," said David Durkee, the couple's attorney.

Citizens previously said it considered the drywall a pre-existing condition, leading to pollution that could cause future damage, something not covered under most policies nationwide. That's why the insurer said it had earlier issued a notice of non-renewal to James and Maria Ivory.

Following reports by media groups including AP, the company asked to perform a second home inspection last week. It told the couple on Thursday it reversed its decision and would continue the policy at least into 2011.

"We're just elated," said James Ivory, who has sued his builder to replace the wallboard. "I mean, you never hear of an insurance company changing their mind."

Citizens spokesman John Kuczwanski said "this is all just so new" that insurers are only now beginning to determine how to address it. He added, however, "If someone has Chinese drywall, they can still get a policy with us."

U.S. Sen. Bill Nelson of Florida had sent letters to 11 insurance companies requesting policy guidelines on Chinese drywall and expressing outrage at cancellations.

"The Associated Press raised serious questions in its recent coverage of insurance companies and homeowners' drywall claims," Nelson said Friday. "Some of these companies need to be shamed into doing the right thing."

Thousands of homeowners nationwide who bought houses built with the defective materials are finding their lives in limbo as hundreds of lawsuits like the Ivorys' work through the courts.

Experts warn that cases like the Ivorys', in which insurers drop policies or send notices of non-renewal based on the presence of defective drywall, will become rampant as companies process hundreds of claims.

Read more: http://news.yahoo.com/s/ap/20091023/ap_on_bi_ge/us_chinese_drywall