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  The Wall Street Journal  

August 24, 2004

 

Mold Liability Nags Restorers Of Wet Houses

By KRIS MAHER
Staff Reporter of THE WALL STREET JOURNAL
August 24, 2004; Page B1

MORRISTOWN, Tenn. -- Chuck Dewald stood at the front of the classroom and soon lost his temper. He had just given 14 water-damage restoration professionals a tour of a flooded house and asked them how they would dry it out.

His students couldn't reach a consensus, and in this business, a lack of standard operating procedures hurts restorers' credibility with insurers, argues Mr. Dewald. "Guys, the insurance industry has no respect for us whatsoever," said Mr. Dewald, who also runs a small water-damage restoration company himself. "I'm here to tell you how stupid you are."

This was day one of Mr. Dewald's Vortex Drying School -- boot camp for water-damage restorers. A day earlier, Mr. Dewald and his son, also named Chuck, had walked through a 900-square-foot house and aimed the stream from a garden hose at everything in sight, drenching carpets, furniture and walls. The mock house, which features a furnished den, kitchen, bathroom, exercise room and bedroom, sits inside a warehouse Mr. Dewald built in 1998 a few steps from his own home here to test his theories about drying. His mission: to get more restorers to follow his science-based drying method -- which he says can cut drying times in half.

[Chuck Dewald]

Mr. Dewald's own timing couldn't be better. A job that once involved little more than placing fans and humidifiers inside a building and waiting for it to dry has grown more complex and fraught with risk, since water damage has increasingly been linked to mold damage.

U.S. insurers paid out a record $3 billion in mold-related claims in 2002, up from $1.3 billion the previous year, according to the Insurance Information Institute. Many of those claims originated with water damage caused by problems such as an overflowing washing machine or burst pipe. Skyrocketing mold claims have shaken up both insurers and restoration experts -- who can end up liable themselves if homeowners claim they botched a cleanup job.

As a result, many of the estimated 16,000 water-damage-restoration companies in the U.S. have faced sharply rising insurance premiums, making for a tougher business environment. Yet people continue to open such companies because they are relatively inexpensive to start, and there are no licensing requirements. Many are small, independent franchisees of ServiceMaster Co. and Servpro Industries Inc.. Many carpet-cleaning companies also frequently venture into drying and other remediation services. Most drying companies have fewer than 10 employees. Water-restoration technicians earn $25,000 to $80,000 a year, depending on their experience and training.

To keep their careers afloat, more restoration professionals recognize that they need training -- to help them communicate with anxious homeowners and wary insurance adjusters, and to avoid mistakes that can lead to costly litigation. "The standard of professional practice is being raised quite rapidly," said Ron Reese, a Hailey, Idaho-based partner with Certified Restorers Consulting Group LLC, which provides damage-assessment and litigation support to restoration companies, insurers and law firms.

Even insurers are sending employees to drying school because they hope to trim payouts based on the advances they see in such programs. Rich mold payouts "made all of us rethink how we were handling these claims," said Peter Day, assistant director of personal market claims education for Liberty Mutual Insurance Co. the big Boston-based insurer. Up to 30% of claims it receives stem from water damage. So far, Liberty Mutual has sent 120 adjusters, or 60% of its adjuster staff, to the three-day course at Mr. Dewald's school, which costs $1,195 per person.

Mr. Dewald's drying school is widely credited as the first one to flood a house to teach drying theory and hands-on techniques, and so far about 2,500 students have attended. The Institute of Inspection Cleaning and Restoration Certification, an industry group in Vancouver, Wash., teaches a course modeled on Mr. Dewald's, and the Association of Specialists in Cleaning and Restoration, based in Millersville, Md., also soaks a house while teaching industry techniques.

Dri-Eaz Products Inc., a Burlington, Wash., manufacturer of dehumidifiers, fans and other drying equipment, also runs schools. It says that business at its three schools (where they flood a house for hands-on training) in the U.S. and one in Canada is so good that it is opening a fourth in Milton Keynes, England, in October. The company says 70% of people who take a drying course pass through its schools, which dwarfs Mr. Dewald's operation.

The industry agrees on this point: "If you can dry something reasonably rapidly you won't have any mold problems," said Martin L. King, technical adviser to the Association of Specialists in Cleaning and Restoration. Yet it's rife with disagreement about the best way to go about it.

On the first day of Mr. Dewald's course this became clear. Suggestions for drying his mock house included drilling holes in the walls to let in air, removing carpeting, and "burping" the house by opening windows to let out moisture already in the air -- all of which would work, but not efficiently, Mr. Dewald said. Estimates for the job ranged from $5,500 to $9,000.

During the course, students used extraction equipment that vacuums up water from carpets, positioned a dozen high-powered fans to put moisture into the air and two dehumidifiers to dry the air. More important, they learned to approach drying more scientifically, such as measuring the vapor pressure and relative humidity inside and outside the house to determine if the house was drying at an optimum rate, and to add or remove certain equipment if it wasn't.

With better drying practices, Mr. Dewald said that in most cases he can cut drying times as well as avoid costly restoration work, such as ripping out carpets or plasterboard.

Mr. Dewald's approach to the students -- which included industry veterans and budding professionals -- focused on being tough. "Guys, your business will start growing when you start knowing what you're talking about. Listen to an old hillbilly from Tennessee," said Mr. Dewald, who is 50.

Students like Woody Dunwoody were won over. Mr. Dunwoody, who owns First Response Cleaning and Restoration in Columbia, S.C., said he hadn't previously grasped many points, including how air temperature affects the efficiency of dehumidifiers. "I should have come to this course four years ago," Mr. Dunwoody said.

Before students finished the course they got another surprise. Most said they would have expected the structure to dry in a week, but on the third day the house -- which has been flooded nearly 200 times and is mold-free -- was dry.

 

 

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