Va. court: Insurance doesn’t cover drywall damages

chinese-drywall virginiaJustice S. Bernard Goodwyn A Virginia Supreme Court Judge handed down a decision Thursday that legal experts say closes the door on Virginia homeowners’ attempts to obtain payments from their insurance companies for damages caused by defective Chinese drywall.

The court agreed with an earlier ruling that damage caused by drywall in Larry Ward’s Virginia Beach home was not covered because of several exclusions in Ward’s policy with TravCo Insurance Co.

Legal experts said the decision in TravCo v. Ward probably will prevent hundreds of homeowners from receiving payments from their insurance companies.

"To me, what these kind of cases illustrate is the Swiss cheese nature of homeowners’ insurance policies," said Tom Baker, a law professor at the University of Pennsylvania. "There are all these different exclusions that exclude things that people really need insurance for."

In 2007 Ward bought a new home in Virginia Beach built with defective Chinese drywall, which emits noxious odors and corrodes household appliances and equipment. In 2009 Larry Ward sought coverage under his homeowners’ insurance policy issued by TravCo Insurance Company (TravCo) for damages allegedly caused by sheets of drywall manufactured in China (Chinese drywall) that were installed in his home during its construction. Travco denied the claim and then sought a judgment from courts.

A lower court ruled in TravCo’s favor in 2010, and Ward appealed.

The Supreme Court of Virginia ruled Thursday that the drywall was not covered because Ward’s policy contained four exclusions: latent defects; faulty, inadequate or defective materials; rust or corrosion; and pollutants, which include gaseous irritants or contaminants.

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