On June 3, 2010 Judge Robert G. Doumar of the U.S. District Court for the Eastern District of Virginia found that a homeowner’s policy did not cover damages associated with Chinese manufactured drywall. In Travco Insurance Company v. Larry Ward, Larry Ward alleged that the drywall in his Virginia Beach home released sulfuric gases into his home, damaging his air conditioning, garage door and flat-screen televisions. When Ward made a claim under his homeowner’s insurance policy, his insurer sought declaratory relief as to whether there was coverage.
On the insurer’s Motion for Summary Judgment, Judge Doumar found that the damages alleged did constitute a “direct physical loss” within the meaning of the policy. However, the Court found that the policy’s latent defects, faulty materials, corrosion and pollution exclusions excluded coverage for Ward’s damages. The Court also found that none of the losses qualified for coverage under the policy’s ensuing loss provisions. Thus, the Court ruled that the policy did not cover removing or replacing the drywall, or any damages stemming from the drywall. However, the Court would not “categorically rule out” that other, as-yet unclaimed, losses might be covered.
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The opinion can be found here.