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Judge Rules Insurance Policies Don't Cover Damage From Defective Drywall

U.S. District Court Judge Eldon Fallon in New Orleans has ruled that insurance policies do not cover damages to homes or personal property caused by...
December 21, 2010

U.S. District Court Judge Eldon Fallon in New Orleans has ruled that insurance policies do not cover damages to homes or personal property caused by corrosive Chinese drywall, and that insurers do not have to cover relocation costs for people whose homes contain the defective product. The ruling was the result of motions brought by 10 insurers in consolidated litigation over defective drywall and is the most significant insurance ruling on the issue in Louisiana so far.

In siding with plaintiffs, Judge Fallon determined that Chinese drywall does cause physical damage to a home since the product is corrosive and found that policy exclusions for latent defects, pollution dampness and pollution do not apply. However, the remainder of the ruling made this point irrelevant; ruling for insurers, Fallon determined that Chinese drywall is a faulty material, and is properly excluded from insurance coverage, triggering the corrosion exclusion in policies.

Click here to read Judge Rules Insurance Doesn't Cover Drywall (New Orleans Times-Picayune 12/17/10)

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