Earlier this month, a Florida circuit court judge ruled that Chinese drywall damage to a home is covered under the standard Florida homeowners insurance policy. In Walker v. Teachers Ins. Co., Case No. 09-17303, the Court determined that the home and its contents suffered a “direct physical loss” due to the presence of Chinese drywall; and policy exclusions for “wear and tear” and “errors, omissions, and defects” did not apply. The policy did not contain a “pollution exclusion.”

With respect to claims for damage to personal property, the policy provided coverage only for damage caused by a “named peril.” “Smoke” was a peril named in the policy, but the term was not specifically defined. The Court utilized a dictionary definition of smoke, which defined smoke as “a suspension of particles in an gas.” The Court then found that the sulfur particles contained in the “off-gassing” caused by the Chinese drywall constitutes “smoke” under the policy. Accordingly, the Court held that the damage to personal property was also covered under the policy.

A copy of the Court's decision is here.