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The insurer already dropped coverage on two vacant homes because of defective drywall, which corrodes metal, emits a foul smell and causes a host of other problems, the South Florida Sun Sentinel in Fort Lauderdale reported.

Citizens is a not-for-profit, tax-exempt government corporation that provides insurance to Florida property owners, the company's Web site said. As the private insurers seek to reduce their risk, states have attempted to fill the market need with "insurers of last resort", such as Citizens.

Most of the 58 homes for which claims have been filed for tainted drywall in the last 18 months have been reviewed and will continue to be insured, Citizens spokeswoman Christine Ashburn said. The company determined the damage wasn't considered extensive and the homes remain occupied.

Citizens does not cover homes with existing damage, no matter the cause, Ashburn told the Sun Sentinel in Wednesday's article.

"If a home has existing damage, we will not provide coverage for the property unless the damage is repaired, or we are provided with proof of intent to repair the property", Ashburn said.

Most insurance companies, including Citizens, fought against paying homeowners' claims for Chinese drywall, saying they weren't responsible for covering the damage, said Tom Lynch, a Citizens board member and president of Plastridge Insurance Agency, with offices in several Florida locations. Damage caused by faulty drywall typically isn't covered and some insurance policies specifically exclude coverage of damage that isn't sudden or accidental, he said.

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