A federal judge has ruled that a homeowner’s insurance policy does not have to pay for damages caused by faulty Chinese drywall. With Chinese drywall continuing to be a concern for homeowners, the judge’s ruling could affect how thousands of lawsuits by homeowners will be settled.
The judge based his decision on the exclusion within the homeowner’s policy for damage caused by latent defect, faulty materials, corrosion, and pollution. With this exclusion, the policy would not cover removing or replacing the faulty drywall or any subsequent damages.
Needless to say this decision sets an unfavorable precedent for homeowners.