It seems some Chinese drywall victims are facing another headache.   According to The Wall Street Journal, insurance companies are refusing to renew, and in some cases canceling,  policies on homes with the defective drywall.

As we’ve reported previously, insurance claims for Chinese drywall damage are usually denied because of pollution and builder defect exclusions written into most policies.  But according to The Wall Street Journal, insurers are trying to protect themselves from future losses by refusing to renew and canceling policies.  A spokesperson from Citizens Property Insurance Corp., the largest home insurer in Florida, told the Journal that the corrosion caused by Chinese drywall could lead to “a likely future claim for a covered peril such as fire or a water leak,” which the insurer would be responsible for covering.

As a result, insurers are moving to drop homeowners once they make a claim for Chinese drywall damages.  For instance, Citizens confirmed that it had informed some policyholders that it will not renew their policies unless needed repairs are made within six months of the notice.

Another insurer, Universal North America, sent a notice of cancellation, which is more serious than a nonrenewal, to at least one policyholder in Hallandale Beach, Fla.  The letter cited the presence of Chinese drywall as an “unacceptable condition . . . which has been shown to have adverse long-term effects on the plumbing and other dwelling components,” the Journal said.   Universal has  about 105,000 home-insurance policies in Florida.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to an earlier Wall Street Journal report, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.