Should Louisiana homeowners be filing homeowner insurance claims for their Chinese Drywall damages? The answer is complicated, but ultimately, our answer is yes.
Will There Be Coverage?
Over the past few months, we’ve discussed whether insurance companies will cover losses related to Chinese Drywall (See Insurance Coverage category).
Our predication was that claims would be denied based on Pollution Exclusions, and from what we’ve seen so far, insurance companies across the country are beginning to churn out these types of denial letters.
While the talk amongst insurers and adjusters is that these damages are not covered, an insurance company declaring something to be true does not make it so. The applicability of the “pollution exclusion” will ultimately depend on a number of factors, some known and others currently unknown: (1) the language of the exclusion; (2) The scientific explanation behind the damages; and (3) Your home’s jurisdiction.
What The Blogosphere Says
A quick read of our blog, and you’ll know what we’re saying about homeowners insurance claims: that insurers may very well be liable for these losses. But what are some others in the country saying?
An August 2009 article from Inside Counsel has a long discussion (and quotes us!) about suits against homeowner insurers, and notes that the “pollution exclusion” may not be as clear as the insurance companies would like to believe. The debate is lively in Florida according to the Herald Tribune. Merlin Law Group’s Property Insurance Coverage Law Blog has a great post about both sides of the argument.
We suggested in the past that Louisiana homeowners may have a better case than homeowners in other states, because of Louisiana’s narrow interpretation of the pollution exclusions applicability.
What To Do…What To Do
This much is clear: If you don’t file your insurance claim now (or soon), the time available to you to file the claim will pass. How depressing it would be for homeowners who sat on their hands for this debate to reach a judge 12 or 14 months from now, and the decision to favor homeowners!
This can happen.
Many of the claims available to homeowners, builders, suppliers, subcontractors and other parties to this Chinese Drywall mess are based on a lot of legal mysteries. How will the New Home Warranty Act be interpreted? Will insurance policies exclude or cover losses? Are actions against the suppliers already prescribed?
Who knows – in 12 months, we may know that builders are absolutely not liable in Louisiana, but insurers are, or vice versa. Homeowners should file insurance claims against their casualty policies, and should file suit against the insurer after the claim is denied, because there very well may be coverage. And with insurers denying all Chiense Drywall claims, pursuit of the claim through litigation is the only way to get paid.
Will My Premiums Increase?
This is something homeowners should discuss with their insurance agent. However, it is very possible that premiums may be increased if you assert a claim for insurance coverage. If the claim is paid, the payment will likely be used in calculating any rate increases.
If the Chinese Drywall loss was just a small $5k or $10k claim, there might be good reason to not file the claim. However, some Chinese Drywall claims have $50k-100k or more in damages. Depending on your financial stability, the risk of losing this amount may be greater than the risk of a future premium increase.
We Sue Insurers
Wolfe Law Group has filed suits against homeowners insurance companies related to Chinese Drywall damages, and we’d be happy to discuss filing suit against your insurer, too. Learn more about our firm by reviewing this promotional brochure.
