Homeowners Insurance For Louisiana

Chinese drywall manufacturer will reimburse homebuilders for remediation costs

Knauf, a major manufacturer of problem drywall from China, will reimburse home builders for the cost of remediating homes, attorneys told U.S. District Court Judge Eldon Fallon on Wednesday. While thousands of people are still stuck with homes unfit for habitation or sale, Wednesday's deal will fix at least 800 homes around the country and extricate some builders from the litigation.

"It allows the home builders who have been repairing homes to be reimbursed. It gets the homes out of litigation," said Kerry Miller, and attorney for Knauf, a German company with plants in China that has been working to resolve problems while other overseas manufacturers have hid behind the limits of international legal jurisdiction.

Bruce Steckler, an attorney on the plaintiffs steering committee who works on insurance and builder issues, said the program will reimburse large national builders who went ahead and repaired on their own. It will also help medium-sized builders with the wherewithal to fix homes if they had the money to actually do so.

The deal only applies to properties with Knauf-brand drywall.

Miller said as many as 100 homes in Louisiana could get fixed through the agreement. The deal would probably affect a handful of major local builders, such as Sunrise Homes, which built subdivisions on the Northshore after Katrina with bad drywall. Negotiations with Sunrise and a few other local companies are on-going, Miller said.

Larry Kornman, the chief executive of Sunrise, said that Knauf contacted his company a few months ago and described a program, but he hasn't heard from the company since then. "Anything that can get the customer taken care of, we're all for that," Kornman said.

The program is aimed at subdivisions or neighborhoods of homes; it probably will not help small builders who had the misfortune to have a handful of scattered-site homes built with bad drywall.

The program also will not help homes that were built with a mix of Knauf drywall and bad drywall from other companies, such as Taishan Gypsum Co., a Chinese company that has so far dodged the litigation.

LA Supreme Court Sides with AG Buddy Caldwell in a Unanimous ...

Following Hurricanes Katrina and Rita, the State of Louisiana paid out billions of dollars in Road Home funds to help expedite home repairs for storm victims. In exchange for the Road Home money, homeowners assigned to the state the right to receive reimbursement from the individual homeowner’s insurance policy to make the state whole. Insurance companies denied that the state had the right to seek reimbursement.

Now two years later, the Louisiana Supreme Court, in a unanimous decision, ruled in favor of the state setting the stage for full recovery of state money spent to help storm victims.

Attorney General Caldwell said, “This fair and just ruling allows Road Home cases to proceed in court and provides the opportunity for the state to lawfully recover insurance proceeds and avoid a projected one billion dollar shortfall in the Road Home program that otherwise would have occurred.

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