The Governor of Louisiana, Bobby Jindal, has signed a new law into effect that prohibits insurance companies from cancelling the policies of homeowners who have toxic Chinese drywall in their homes. The drywall, which can corrode electrical equipment and fill homes with a rotten egg smell, is difficult and expensive to remove. Thousands of complaints were received from homeowners across the United States who say that toxic Chinese wallboard imported between 2004 and 2007 releases sulfuric odors, causes health problems, and corrodes wiring and appliances. Millions of sheets of the Chinese drywall were imported from China into the United States due to a domestic shortage caused by a housing boom and construction following a serious of hurricanes that struck the southeastern United States.
The new Louisiana drywall insurance law will be in effect until June 1, 2013. It prevents insurance companies from abandoning homeowners who find that they have imported Chinese drywall in their homes. However, 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. The law only applies to homes with Chinese drywall imported before December 31, 2009. Insurance companies who defy the law could be penalized up to $15,000 per incident.
For a copy of the new law click here
Bryan Richmond and Joanna Roberto