House Insurance Cancellations to Be Prevented by Bill in Louisiana

The Louisiana Senate will soon deliberate on a bill that would prevent house insurance firms from canceling coverage for homeowners and businesses with properties that have Chinese corrosive drywall.
 
The bill, authored by Senator Julie Quinn, is designed to stop insurance companies from not renewing or from canceling or raising deductibles of premiums for properties that have Chinese drywalls.
 
Most of the state’s residents who rebuilt their houses after Hurricane Katrina had revealed that the drywall imported from China emits methane, sulfur and other chemicals that caused damage to appliances and homes and have caused health problems for residents.
 
A big number of Louisiana residents have complained that they are about to lose their coverage because of the Chinese drywall-related claims that they filed. There are also homeowners in the area who have revealed that they have not reported problems related with the drywall for fear of being dropped by insurance companies.
 
The Senate Insurance Committee has approved the measure amid objections from house insurance companies who have asserted that the measure violates existing contracts and would cause insurance rates in Louisiana to rise.
 
The legislative bill covers drywall manufactured or imported from China prior to December 31, 2009. Those with insurance policies that have been running for three years or so are protected from lack of renewal or cancellation under existing regulations. The latest bill would affect people whose insurance coverage had been running for less than three years.
 
According to legislators, homeowners who violate these specifications will be penalized and will be asked to pay the amount equal to half of the value of the insurance for the property, plus lawyer fees and court costs.
 
So far, the federal court has received more than 2,000 claims over the drywall, and together with state courts, has ruled on class action lawsuits related to the issue. Meanwhile, the Attorney General Office of Louisiana is suing the manufacturers and developers of the drywall on behalf of the local government.
 
The Louisiana bill is expected to provide some protection to homeowners who are at risk of losing their house insurance policies over the Chinese drywall issue. The Senate is in the process of deliberating on the legislative measure.