S.B. 565 Passes in Louisiana Senate and Draws Closer to Becoming Law

BATON ROUGE, La. (April 28, 2010) Baron & Budd, P.C. shareholder Burton LeBlanc spoke out in support of a Louisiana bill that would provide certain protections for homeowners struggling to deal with Chinese drywall. LeBlanc testified in favor of the bill at a hearing before the Senate Insurance Committee last week, along with Baron & Budd Shannon Schulz. The bill passed unanimously before the committee, and earlier this week, the Senate voted unanimously to pass the bill, bringing it another step closer to becoming law.

Sponsored by State Senator Julie Quinn, Senate Bill 565 would forbid insurance companies from canceling or refusing to renew a homeowner’s policy based on the homeowner having made a claim involving Chinese drywall. The bill would also mandate that insurance companies reinstate any policies that were already canceled or non-renewed because of Chinese drywall claims.

If a homeowner’s policy is cancelled or not renewed, a homeowner with Chinese drywall will not be able to find alternative coverage. Failure to maintain coverage puts the mortgage in default. Then the homeowner is at risk for losing their home altogether.

Uniformly, insurance companies have refused to cover claims for Chinese drywall. Some homeowners fear losing their insurance coverage so much that they don’t make the Chinese drywall claim, despite the devastating effects of their homes.

“Senator Quinn has been a true champion of Louisiana residents dealing with Chinese drywall,” said LeBlanc, “and her bill is vital to protecting homeowners while they try to resolve the problem of Chinese drywall in their homes.”

Claims against the drywall manufacturers and builders are winding their way through U.S. courts. Federal Judge Eldon Fallon, who presides over all Chinese drywall claims pending in federal court, issued a decision earlier this month that set standards for remediation and compensation in these cases. Yesterday Judge Fallon awarded $164,000 to a Louisiana family from Mandeville to compensate them for Chinese drywall damage. This is the first award to a Louisiana resident for damages caused by Chinese drywall.

About Baron & Budd, P.C.

Dallas-based Baron & Budd, P.C., with offices in Baton Rouge, Austin and Beverly Hills, is a nationally recognized firm with more than three decades of experience representing people and communities harmed by corporate negligence.