MIAMI — Homeowners living in houses with suspect Chinese drywall are already in a bind: Their air conditioners stop working, a rotten-egg smell permeates their homes, they suffer a litany of health problems including troubled breathing, nosebleeds and headaches.
Now, some of them could lose their property insurance coverage.
Many homeowners have filed claims with their home insurers to repair the drywall damage. That's turning out to be a dead end: Most property insurers are denying the claims because homeowners policies don't cover contamination or building material defects.
But once an insurer knows there is drywall damage in a home, the existing damage could be the trigger for not renewing a policy unless repairs are made.
That's the dilemma for James and Maria Ivory, who moved to Punta Gorda in February. The Ivorys had to have the air conditioner replaced right away and noticed metals were corroding shortly after moving into their home, which had never been lived in.
They filed a claim with Citizens Property Insurance to rehabilitate the home, asking for the drywall to be ripped out and corroded items be replaced,
The Ivorys' claim didn't specify a dollar amount, but some builders have estimated repair work generally can run at least one-third of the original construction costs.
The state-run insurer denied the claim. Then last month, the couple received a notice from Citizens, saying their homeowners policy won't be renewed in March because it has no proof the damage the Ivorys wanted their insurance money to pay for has been repaired.
"There's nothing that's ever happened to this home other than Chinese drywall," said David Durkee, a Coral Gables attorney who is representing the couple. "He needed to go to Citizens because he couldn't get insurance elsewhere. That was supposed to be the safety net for residents in Florida."
Durkee, who is handling several lawsuits against builders and drywall suppliers, said this is the first time he has seen an insurer use drywall damage as a reason for dropping a policy.
Thousands of homes in South Florida and tens of thousands nationwide are suspected of having the tainted imported drywall. Large amounts were imported into Florida to deal with demand from the home-building boom and reconstruction following hurricanes of 2004 and 2005.
So far, there is no scientific proof that the imports are causing the problems, but homeowners with the material have similar complaints.
Homeowners insurance policies are designed to cover "sudden accidental losses" such as the water damage caused by busted pipes or a ripped out roof due to a hurricane, said Dick Luedke, a spokesman for State Farm Insurance. However, homeowners policies generally exclude pollution or contamination damage or problems stemming from defects in building materials.
State Farm has had fewer than two dozen claims with drywall damage. Luedke says no policy so far has been canceled because of a drywall problem. But the company can re-evaluate a policy if the risk of insuring a home has increased dramatically.
The giant international reinsurer Swiss Re said in report issued last month that most homeowners insurance companies are using exclusions to deny claims from damage stemming from imported drywall.