Chinese Drywall and Corrosion

 

I have seen two recent FC&S articles regarding Chinese Drywall. The first is entitled “Chinese Drywall: The Next Big Issue?” and the second is a Q&A from Louisiana entitled Chinese Drywall. Both articles state that corrosion damage to pipes and wires would be covered under ensuing loss.

Some policy language states “We do not insure for property described in Coverage A and B caused by any of the following, However, any ensuing loss to property described in Coverage A and B not precluded by any other provision in this policy is covered.

 
Other policies have similar ensuing loss language such as, “But we do insure ensuing covered loss unless another exclusion applies.”

These policies have a specific exclusion for corrosion. Would corrosion caused by the drywall still be covered under these policies?

Louisiana Subscriber

The intent of the corrosion exclusion is to exclude corrosion that is part of the normal aging process. The corrosion that results from the drywall is not part of a normal process and is directly related to the vapors emitted from the drywall. Therefore, in our opinion, it would still be covered. However we're just beginning to get into court cases on all this, so it'll be interesting to see what courts decide on a number of drywall issues.