Payton
Quinn
The Louisiana Senate unanimously passed a bill that prohibits insurance companies from canceling or not renewing policies of homeowners with Chinese drywall.
Senate Bill 595 passed Tuesday and now awaits Governor Bobby Jindal's signature.
Sponsor Sen. Julie Quinn, R-Metairie, said she was motivated to push the bill after learning of the "heartbreaking" stories of homeowners who were denied coverage or lost insurance altogether because of Chinese drywall found in their homes.
"The problem with that is that homeowners could not get coverage except for, once in a blue moon, [Louisiana Citizen's Fair Plan]," she said. "When a homeowner didn't have insurance, people would go into default of their mortgage."
At least 30 Chinese-drywall related civil suits have been filed in Orleans Parish District Court since 2009 and 46 Chinese-drywall cases have been filed in federal court at the Eastern District of Louisiana in 2010.
Sean Payton, head coach of the 2010 Super Bowl Champion New Orleans Saints, was the lead plaintiff in a federal Chinese drywall suit filed in December 2009. The Times-Picayune reported that between 3,000 and 7,000 Louisiana homes were affected by Chinese drywall.
Quinn said that homeowners who found Chinese drywall in their homes had few options because insurance companies would deny their claims and then send letters of non-renewal on homeowner policies. The insureds would either have to stay in their homes, which could threaten their health, or move to a new home and pay costs on two homes.
Quinn said that insurers dropping coverage of homeowners with Chinese drywall was causing a trickle-down effect that was putting people out of their homes entirely.
The bill passed unanimously, 37-0, even though Quinn said, "legislators anywhere north of Interstate-12 have never even heard of these problems." She said she was able to round up votes by persistently talking to fellow legislators. She also credited media coverage.
Quinn said that the new law will not affect any Chinese drywall suits currently pending but it will require insurers to reinstate policies that had been dropped within 30 days under the terms and conditions they had been before the policy was canceled.
The bill carries a fine for insurance companies who violate terms of the law with a cap of $15,000. The bill prohibits insurers from dropping clients whose homes contain Chinese drywall that was imported before December 31, 2009. The bill's provisions would expire July 31, 2013.
Quinn said she has "no reason to believe Governor Jindal will veto this bill" and that by the time it passed on the floor, she even had insurance companies supporting it.