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Last Post 04/02/2010 6:42 PM by  brighton
Chinese Drywall
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ALANJ
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11/03/2009 9:24 AM

    I am hearing alot of activity due to all the defective chinese drywall that came into the US after the 2004 to 2007 storms. Has anyone handled any claims as a result of this. I have heard thousands of homes in multiple states are affected.

     

    Thanks,

     

    Alan

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    Ray Hall
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    11/03/2009 10:18 AM
    I have tried to keep up. It seems all the Homeowners Claims are being investigated by adjusters. Then a formal coverage deniel is being mailed citing several exclusions.

    On the third party liability side it seems the plaintiffs have not gone to the China source at this time. It would also pass through 2 or 3 more hands in the US and since most of the cmall contractors have only 1 million insurance this would only cover 10-20 houses if each loss was 50-100 k. Lots of real problems on the HO coverage to trigger "risk of loss coverage". I have not had my first claim...yet...
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    ALANJ
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    11/03/2009 10:36 AM
    I'm hearing that the lawyers are telling people to turn in HO claims anyway. I believe this is just getting started. Should be some great T&E work down the road. However, I don't see any HO coverage for any of the damage.
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    Ray Hall
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    11/03/2009 12:22 PM

    As many of you heavy liability/property adjusters recall some of the very large manuscript liability and property forms use some words that make the "risk of loss" allegation go to the courts for clairification. Thiswill probably be the path of all the first and third party claims out of the chinese drywall problems.This should be some very good T & E work for years to come. I don.t think the carriers will start asking the C & O experts and the remediation contractors to turn this problem into another "mold gold" circus. "it is what it is", why in the heck do we have to furnish our own rope to be hung with?


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    ALANJ
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    11/03/2009 3:08 PM
    What about the insurance companies who pushed approved contractor progrems and their contractors used the defective drywall? Most insurance companies guranteed their work? This is where a ton of T & E work should come from. This may in the long run eliminate these type of programs and open up work for the rest of us.
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    brighton
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    11/03/2009 5:13 PM
    Posted By ALANJ on 03 Nov 2009 03:08 PM
    What about the insurance companies who pushed approved contractor progrems and their contractors used the defective drywall? Most insurance companies guranteed their work? This is where a ton of T & E work should come from. This may in the long run eliminate these type of programs and open up work for the rest of us.
    Excellent point...here comes the class action now...has anyone ever seen any information on this product previously to the issues that we all hear about now. Did the contractor know the drywall came from China? Has there ever been anything mentioned about the problems with this product before? T&E; it will may not be as great as doing cat work but as has been said before, it pays the bills longer than one decent hail storm will. Espicially with the number of claims in FL.



     

    Rocke Baker
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    RJortberg
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    11/03/2009 5:49 PM

    www.catadjuster.org/Forums/tabid/60...fault.aspx

    There are some prior posts here about this topic.... I think Chuck D. would be a good person to ask about this.

     

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    Ray Hall
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    11/03/2009 5:53 PM

    Man was was I asleep on this angle. This will open up the biggest can of worms and be the carriers worst nightmare on losses were the contractors were used. Should not be that many on the large hurricane losses, but enough to really cripple this program.

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    stormcrow
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    11/03/2009 8:43 PM
    I expect that as there was a shortage of drywall every where it will be more then just hurricane claims where this was used. Especially if the contractors were able to save a few $$$ by using this stuff. This industry ever gets boring.
    I want to die peacefully in my sleep like my grandfather, not screaming in terror like his passengers.
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    ALANJ
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    11/04/2009 10:56 AM
    A class action will never fly as everyone will have different damages. Having the same or similar damages is a required element of any class action. I would love to see any written warranty from any carrier backing up the vendors work. If the contractors were on the approved vendor program this will open a can of worms larger than a super wal mart. If you have any carrier buddies you might want to start marketing yourself or your team. I suspect they are going to want people with tons of experience to handle these type claims.
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    Medulus
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    11/04/2009 11:43 AM
    Quite a visual, Alan. I am picturing a can of worms larger than a Super Walmart. Fish Bait for life!
    Steve Ebner CPCU AIC AMIM

    "With great power comes great responsibility." (Stanley Martin Lieber, Amazing Fantasy # 15 August 1962)
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    Ray Hall
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    11/04/2009 5:47 PM

    This is a fiction. A rather large Homewoner insuror who has been using contractors for several years. Several of these contractors have purchased and installed chinese drywall and a claim is reported during the policy year for the corrosive damage and demand of remediation, because of the agency agreement between contractor/carrier.The Homewner adjuster recommends remediation with the same contactor/or another contractor with an agreed cost. The loss is paid by the Homeowner Policy to keep out of the hands of the attorneys. The carrier has ever intention of fileing a subrogation claims against the contractors CGL coverage as both are members of AF (arbitration forms). This is under completed operations coverage. AF rules the applicate can not subrogate if the first party coverage(ISO HO-3) conditions were not met as explained in the respondents answer.

    Same case: The carrier turns down the presented HO loss and tenders it to the contractors CGL insuror for protection & Indemnity. This insuror takes the claim, opens a lawsuit in court, names the homeowners carrier who paid the claim that was not owed as a third party defended. With discovery gets all the contracts, and ask for a summary judgement for the whole loss payment plus legal cost. My old age security gets better by the day.

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    FloridaBoy
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    11/04/2009 6:45 PM
    Posted By ALANJ on 03 Nov 2009 10:36 AM
    I'm hearing that the lawyers are telling people to turn in HO claims anyway. I believe this is just getting started. Should be some great T&E work down the road. However, I don't see any HO coverage for any of the damage.
    The claims I have handled in Florida have been denied.



     

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    johnpostava
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    11/05/2009 8:41 AM
    I just returned from the PLRB's Large Loss Conference held in Tampa this week. I attended a Chinese Drywall (CD) session presented by a gentleman from Crawford a CPA and an attorney. Chinese Drywall wont be the next mold because it is limited in scope as to the number of homes which may be affected but it will have an impact on the claims industry. Whether it be the installer, sub-contractor, general contractor, supply house, distributor or manufacturer, someone is going to get sued. Issues like when was the exact date of loss, are there multiple dates of loss depending upon what part of a home's systems were affected, proving it was the additional sulfur content found in Chinese drywall that cased the damage to the HVAC, plumbing, electrical systems, etc...and other concerns will be sending most of these claims to court. Adjusters will have to do the estimates for their respective carriers. Estiamtes are as high as $100K per average house to repair. CD is an issue that will not be going away and something to watch as it develops.
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    FloridaBoy
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    11/05/2009 10:17 AM
    Posted By johnpostava on 05 Nov 2009 08:41 AM

    I just returned from the PLRB's Large Loss Conference held in Tampa this week. I attended a Chinese Drywall (CD) session presented by a gentleman from Crawford a CPA and an attorney. Chinese Drywall wont be the next mold because it is limited in scope as to the number of homes which may be affected but it will have an impact on the claims industry. Whether it be the installer, sub-contractor, general contractor, supply house, distributor or manufacturer, someone is going to get sued. Issues like when was the exact date of loss, are there multiple dates of loss depending upon what part of a home's systems were affected, proving it was the additional sulfur content found in Chinese drywall that cased the damage to the HVAC, plumbing, electrical systems, etc...and other concerns will be sending most of these claims to court. Adjusters will have to do the estimates for their respective carriers. Estiamtes are as high as $100K per average house to repair. CD is an issue that will not be going away and something to watch as it develops.
    I don't think it is going away either but at his point in time the claims are being denied. There will be other liability issues. Some of the losses I handled were foreclosures and no home inspection was done, or apparently required, by the lender or the carrier. Googling the issue is interesting.



     

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    ALANJ
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    11/05/2009 10:53 AM
    The City of ABC located in the state of XYZ passes a law that says all of the defective drywall must be removed. Question: Does the ORDNANCE OF LAW coverage kick in?
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    claims_ray
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    11/05/2009 11:05 AM

    I do not believe that Ordinance an Law will and unless there is coverable damage there would be no reason for the claim.

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    ALANJ
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    11/05/2009 12:22 PM
    House with CD gets hit by a hurricane. Two rooms are water damaged. I see all kinds of problems with people wanting hidden damage from CD covered under the loss. Job security for years to come once this gets rolling.
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    Tom Rongstad
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    11/05/2009 6:16 PM
    Posted By ALANJ on 05 Nov 2009 10:53 AM
    The City of ABC located in the state of XYZ passes a law that says all of the defective drywall must be removed. Question: Does the ORDNANCE OF LAW coverage kick in?

     

    A covered Cause of Loss does not exist, therefore, coverage is not triggered, Ordnance of Law only would not prevail. But lets say the sulfur corrodes the copper electrical wiring, fire ignites, problem solved.
     
    Now lets say the City of ABC does in fact mandate the CD must be removed. Then a wind event, fire event, or water from above event occurs. The coverage would be triggered, some drywall will be removed, and then your ORDNANCE OF LAW mentality would work. But lets see that code application. I believe eventually it will be like Cox V Shell in the PB work.
     
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    ALANJ
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    11/06/2009 10:16 AM
    Tom:

    I think your right on target. Great post.
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