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NU Online News Service, Oct. 30, 10:18 a.m. EDT
A federal report on Chinese drywall found it contains higher concentrations of bothersome chemicals, but said these would not cause the health issues or physical degradation that have been seen.
Lori Saltzman, director, Division of Health Sciences, Office of Hazard Identification and Reduction at the U.S. Consumer Product Safety Commission, said elevated levels of strontium that were found do not pose a radiation safety risk to individuals and homes.
James E. Woolford, director, Office of Superfund Remediation & Technology Innovation (OSRTI), Office of Solid Waste and Emergency Response, U.S. Environmental Protection Agency, said sampling data analyzed does not indicate substantive levels of sulfur or strontium that were both found would lead to health issues.
Mr. Woolford added that an indoor air study found detectable concentrations of two known irritant compounds, acetaldehyde and formaldehyde. He noted, however, that these compounds were detected in homes both with and without Chinese drywall, and that the levels of formaldehyde were not unusual for new homes.
Studies are ongoing as the government tries to get to the bottom of a problem that has, according to Michael McGeehin, director, Division of Environmental Hazards & Health Effects, National Center for Environmental Health, Centers for Disease Control and Prevention, caused dry cough, eye irritation, sore throat, and asthma exacerbation. He called the issue a “very perplexing problem.”
While federal agency representatives said “all options are on the table” with respect to a response, they noted that actions such as a recall could require legal action, and the government wants to make sure it has proper scientific justification for such a measure.
Studies will continue and more results are expected next month.
From an insurance standpoint, a representative from Citizens Property Insurance Corporation, the state-created insurer of last resort in Florida, said 24 claims related to Chinese drywall have been individually inspected, and none have resulted in payment.
John Kuczwanski, public information manager for Citizens, said standard for most homeowners policies is an exclusion for builder’s defect and a pollution exclusion. The report from the government stating nothing conclusive at this point further substantiates denials for Chinese drywall claims, he added.
Michael Barry, spokesman for the Insurance Information Institute, confirmed that for homeowners, the policies generally exclude losses that would be associated with Chinese drywall. He said it is considered defective work or inadequate construction materials.
Homeowners could go back to the builder for recourse, and the builder would likely turn to the manufacturer, he said.
Lennar Corporation, a home building company headquartered in Miami, stated in its most recent 10-Q SEC filing, “As of Aug. 31, 2009, the Company identified approximately 500 homes delivered in Florida primarily during its 2006 and 2007 fiscal years that are confirmed to have defective Chinese drywall and resulting damage.”
The company said it has accrued $54.5 million of warranty reserves, which include amounts related to homes identified as having defective Chinese drywall as well as an estimate for homes not yet inspected that may contain Chinese drywall.
Indicating that commercial insurers could see claims related to Chinese drywall, Lennar said in the filing, “The Company has a $33.6 million receivable for covered damages under its insurance coverage relative to the cost it expects to incur in remedying the homes confirmed and estimated to have defective Chinese drywall and resulting damage.”
Lennar listed its insurers as one party it will seek reimbursement from.