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Trust sues insurers over Chinese drywall coverage

Filed in late December of 2009, a trust representing a homebuilder that used Chinese drywall in its construction efforts has sued insurers for coverage of homeowners with the faulty wallboard. The company, WCI communities, is looking for financial assistance with the rebuilding effort necessary for those whose homes contain the toxic material. The Bloomberg News reports

A trust for WCI Communities Inc., the Florida homebuilder that emerged from bankruptcy last year, sued 14 insurers to enforce more than $200 million of coverage for settlements over houses with defective Chinese drywall.

Insurers including units of American International Group Inc. and Zurich Financial Services AG must help repay more than 700 WCI customers whose homes were built with defective drywall from China between 2006 and 2008, Robert Horkovich, the trust’s lawyer, said today in a phone interview.

The complaint, filed Dec. 23 in New Orleans federal court, says WCI customers in several Florida communities claimed that Chinese drywall caused health problems and property damage such as corrosion of wiring and television connections. The case is the first among many drywall suits consolidated in New Orleans to seek money from insurers, Horkovich said.

Any sort of efforts made by parties involved in the installation or use of Chinese drywall in American homes to hold insurance companies and other negligent parties responsible is a positive. Should the suit be successful, it is likely other companies and groups will follow with their own litigation, leaving homeowners in a positive setting in terms of receiving the money to move forward in the removal and replacement of the faulty material. While the complaint still has a large amount of time before it comes to fruition, this still may be seen as progress.

“A prompt and thorough insurance recovery is vital to enabling homeowners suffering from the effects of defective wallboard to remediate their homes and recover their losses,” Horkovich said.

More information on this complaint will be posted on this blog as it becomes available.

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