Homeowners living in houses with suspect Chinese drywall are already in a bind: Their air conditioners stop working, a rotten-egg smell permeates their homes, they suffer a litany of health problems including troubled breathing, nosebleeds and headaches.

Now, some of them could lose their property insurance coverage.

Many homeowners have filed claims with their home insurers to repair the drywall damage. That's turning out to be a dead end: Most property insurers are denying the claims because homeowners policies don't cover contamination or building material defects.

But once an insurer knows there is drywall damage in a home, the existing damage could be the trigger for not renewing a policy unless repairs are made.

That's the dilemma for James and Maria Ivory. The couple retired to Punta Gorda from Colorado in February, buying a home for $109,000 that was built in 2006. The Ivorys had to have the air conditioner replaced right away and noticed metals were corroding shortly after moving into their home, which had never been lived in.

They filed a claim with their insurer, Citizens Property Insurance, to rehabilitate the home, asking for the drywall to be ripped out and corroded items be replaced, among other repairs.

The Ivorys' claim didn't specify a dollar amount, but some builders have estimated repair work generally can run at least one-third of the original construction costs.

The state-run insurer, the largest in Florida, denied the claim. Then last month, the couple received a notice from Citizens, saying their homeowners policy won't be renewed in March because it has no proof the damage the Ivorys wanted their insurance money to pay for has been repaired.

`SAFETY NET'

``There's nothing that's ever happened to this home other than Chinese drywall,'' said David Durkee, a Coral Gables attorney who is representing the couple. ``He needed to go to Citizens because he couldn't get insurance elsewhere. That was supposed to be the safety net for residents in Florida.''

Durkee, who is handling several lawsuits against builders and drywall suppliers, said this is the first time he has seen an insurer use drywall damage as a reason for dropping a policy.

Durkee has written to Gov. Charlie Crist, U.S. Sen. Bill Nelson and Congressman Robert Wexler of Boca Raton about Citizens.

``We cannot let that safety net have a hole in it, period,'' Durkee said.

For its part, Citizens has received about 20 drywall claims so far, and each are handled on a case by case basis, said John Kuczwanski, Citizens' spokesman. Not all the claims are resolved yet.

Thousands of homes in South Florida and tens of thousands nationwide are suspected of having the tainted imported drywall. Large amounts of drywall were imported into Florida to deal with demand from the home-building boom and reconstruction following hurricanes of 2004 and 2005.

So far, there is no scientific proof that the imports are causing the problems, but homeowners with the material have similar complaints of malfunctioning air conditioners metals, a chemical or rotten-egg smell and breathing trouble and nosebleeds, among other health problems.

The Ivorys aren't the only Florida residents who have had Chinese drywall claims denied by the homeowners insurance companies.

Many of Miami attorney Jeremy Alters clients have experienced the same thing.