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Homeowners insurance and defective materials


The world of insurance is both incredibly simple and insanely complicated at the same time. The simple truth is you are covered if your home is damaged and the policy does not have exclusion clauses to say otherwise. The complicated truth is that it often needs a team of lawyers and judges working round the clock to decide out what the policy says. Life should not be like this. It should be simple. You pay the premium and, if you cannot use your home, you should pick up the money from the insurer. Well, that's actually unreal. No insurance company in the world works like that. Once the company has your money, it's like it has crocodile jaws that never want to let go, all the while shedding tears and saying how sorry it is you are not covered.

So welcome to Florida and an interesting new case on building materials. Let's get warmed up with some hypotheticals. Suppose your builder uses wood in key structural points that's the favorite food for the local termites. A few years later, your home falls down. Suppose the bricks come from a bad batch (or from Mexico), and start to crumble, or the builder uses the wrong mortar to hold them together. You get the idea. Well, here comes the Chinese drywall case. For those of you who avoid scare stories about building products, here's a quick introduction. This drywall is strong and durable, but it gives off a gas that smells terrible, may corrode electrical and electronic equipment. and can make some people ill. Thousands of people have been affected and the only way of solving the problem is to strip all the walls down to the studs and start again. Needless to say, this costs thousands of dollars in labor and materials, and you have to find somewhere else to live while the work is done.

When our Florida family discovered they were victims, they contacted their insurers. Without inspecting or discussion, the insurer refused to even consider a claim. Now here's the thing. Most insurance policies exclude any liability if the building materials prove defective or the builders are negligent. The remedy is supposed to be against the manufacturer of the materials or the builder. The neat thing about this case is that the drywall is fabulously strong, but it also gives off a corrosive gas. By a strange mischance, the homeowners insurance policy covered smoke damage. The lawyers and the judge went through all the standard dictionaries and decided smoke is particles suspended in a gas. So the damage caused by this gas was the same risk as smoke damage. A jury trial will decide how much the insurers should pay. It could be a substantial amount because the owners have paid their mortgage on an empty home for two years while paying rent on alternative accommodation. All of which goes to prove that if you have good luck and a good lawyer and a sympathetic judge and the money to wait for all to work in your favor, you can sometimes get a judgment. Whether this home insurance company will appeal and waste another two years before paying, it feels good to see people get this far.

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