Legislation Prevents Insurance Hikes Following Chinese Drywall

04/26/2010

Homes with defective Chinese drywall may suffer corrosion on electrical components including fire alarms, wiring, carbon monoxide alarms and more. Residents of these properties may experience health risks from the sulfur, methane and other chemicals emitted.

A recent bill working its way through the Louisiana legislature will prevent commercial property insurance companies covering these homes from increasing premiums, according to a recent report by the Associated Press. The legislation would also prohibit deductible hikes, failure to renew or cancellation of policies in response to the presence of faulty Chinese drywall.

Senator Julie Quinn sponsored the bill, according to the report, which would apply to those who have had home insurance for three years or more on a property containing defective Chinese drywall manufactured prior to December 31, 2009. Property and Casualty Insurers Association lobbyist Chuck McMains spoke out against the legislation.

''If you can't adjust your premiums to a particular risk, you're going to be causing a situation where you have to spread that risk to everyone else," he told the AP.

Through November, the Consumer Product Safety Commission had received complaints about defective Chinese drywall in 31 states and the District of Columbia, sparking an investigation into the extent of the problem.

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