Water Damage Fraud
This report was commissioned by the claimant to document over charges on a water damage claim.
THE CLAIM STATISTICS
PROBLEM REPORTED: Water Damage
WAS A DIAGRAM MADE?: Yes
SAMPLES FROM INSPECTION: Carpet
PERSONS PRESENT: Inspector & Claimant
THE CARPET
COLOR: Multi-Color
CONSTRUCTION: Tufted Looped
STYLE: Level Loop
SQUARE YARDAGE: See Report
BACK SYSTEM: Conventional Tufted
PRIMARY BACKING: Polypropylene
SECONDARY BACKING: Polypropylene
THE INSTALLATION
TYPE OF SITE: Commercial
TYPE OF BUSINESS: Store
DATE INSTALLED: See Report
METHOD: Stretch-In
CUSHION: None See Report
SUBFLOOR: See Report
AREA INSTALLED: See Drawing
USE & MAINTENANCE INFORMATION AT THE TIME OF INSPECTION
NUMBER OF EMPLOYEES 1
TEMPERATURE: 69.5°F - 20.8° C
RELATIVE HUMIDITY: 61%
VACUUM TYPE: Upright
FREQUENCY: Daily
ENTRY MATS: No
CONDITION of THE CARPET: See Report
SOIL: None Noticed
HEATING TYPE: Central Force Air Gas
COOLING TYPE: Central - Electric
CLEANING: See Report
REASON FOR COMMISSION
This inspector was asked to determine if industry standards for work and pricing were used concerning a recent water damages.
THE REPORT
Geographical Background Information
The carpets in question were installed in the claimant’s retail store at the address above. This store was located in a retail commercial area on a peninsula less than a quarter mile from the Pacific Ocean.
BACKGROUND INFORMATION MADE TO THE INSPECTOR
The carpet in the show-room was purchased approximately two years ago and had performed with no problems until it suffered water damage. On May 12, 1996 water ran from a bathroom for approximately ten hours and after turning off the source, the claimant called ACME CARPET CLEANING for restoration services. A price of $1,400 was quoted over the phone. Restoration services were started that day and a check for $1885 was written for the work.
Two fans were left to help dry the carpet. These fans were placed in the show-room part of the store with no other equipment being left. During the drying process, the carpet in the dressing room frayed from flapping against the tackless strip.
In the storage room where no airmover had been placed, the carpet developed an odor and delaminated. This carpet was later disregarded by the claimant. Two days after the water damage, one wall began to yellow and another cleaning company was hired to dry the wall.
Prices charged by ACME CARPET CLEANING for the services performed were as follows according to the invoice:
SERVICE UNIT PRICE TOTAL
TRAVEL SERVICE, INSPECTION MOISTURE DETECTION $250
FURNITURE MOVING $55
WATER EXTRACTION 635 SQUARE FEET $1.00 $635
SUB-SURFACE DISINFECTING 635 SQUARE FEET $0.20 SQ. FT. 127.50
SURFACE DISINFECTING 635 SQUARE FEET $0.20 SQ. FT. 127.50
AIR MOVERS 2 DAYS $40 PER DAY $160
PAD REMOVAL $74 YARD $2.50 PER YARD $185
CARPET PULLED $74 YARD $2.50 PER YARD $185
CLEANING 635 SQ. FT. $0.25 $160
TOTAL $1885
DESCRIPTION OF PROBLEM AREA BY THIS INSPECTOR
The carpets at the time of the inspection were divided into two sections by a tile aisle. The carpet in the front of the store had no apparent problems while the carpet in a small dressing room was frayed on its edges. No odors were noticed at the time of the inspection.
Total square footage reported of the carpeted area including the back-room section was measured at 382 square feet. The drawing below illustrates the lay out and describes the history. This is not drawn to scale.
FIELD TESTING
Numerous moisture tests were performed in the carpet using a Delmhorst Moisture Sensor. The results of these tests revealed that there were no readings in the carpet at the time of the inspection.
Other moisture tests were performed on the hard surfaces using a TRAMEX Moisture Encounter. This device measures the percentage of moisture in the area tested. The results of these tests revealed that there were moisture readings in excess of 20 per cent measuring 22 to 24 inches up the wall to the left of the show room facing the back of the store. In the bathroom of the store measuring three and a half feet from the floor, moisture reading on the back wall facing the back of the store measured over 20 per cent. The tiled aisle in the show room also measured over 20 per cent.
THE ISSUE OF THIS REPORT
1. Were the restoration practices in compliance with industries standards?
2. Was the pricing of the services rendered comparable to the industries standards charged for those services?
GUIDELINES FOR EVALUATING THE ISSUE
· The standards for determining water damage is the STANDARD AND REFERENCE GUIDE FOR WATER DAMAGE RESTORATION S500 by the INSTITUTE of INSPECTION CLEANING & RESTORATION CERTIFICATION.
· Industries standards pricing for water damage services are determined by numerous reference guides from various manufacturers and trade associations.
INDUSTRY STANDARDS, PRACTICES & DEFINITIONS
On page 29 of the IICRC Standard and Reference Guide for Water Damage Restoration S500 it says this concerning the use of drying equipment for stretch-in carpet:
(3) stretch-in carpet - A minimum of one airmover is recommended per 300 square feet of carpet surface area, or one per room if smaller than 300 square feet. Position airmovers beneath carpet and over salvable cushion for subsurface drying. Place airmovers in a safe location, generally in the comer of the room, directing airflow beneath the carpet surface toward an appropriate exit, or to a point at which dehumidification equipment is located. Give consideration to closets or small storage areas where airflow may be restricted.
It is highly recommended that technicians attach carpet in the vicinity of airmovers to tackless strips using nonrusting staples or tacks. This maximizes carpet flotation and increases drying efficiency. In addition, it does not allow carpet to flap on tackless pins, which may result in shredding of secondary backings and potential destruction of the carpet. Whether cushion is removed or not, airmovers must fully lift carpet from subsurface flooring materials if rapid, thorough drying is to be achieved. On occasions, it may be necessary to facilitate airflow under carpet and prevent flapping by installing 18-24" lengths of 3-4" diameter PVC tubing under the carpet along side airmovers.
3. Dehumidifiers - Rapid dehumidification of the air in water damaged structures is essential to minimize substantial secondary damage to property and materials, to prevent the germination and proliferation of microorganisms, and to protect the health and safety of occupants (restorative drying principle 3, pg. 8).
PRICING GUIDELINES
According to the PRICING FOR PROFITS guideline by DRY EAZ - "Overtime bill rates are normally 25% to 60% over regular time."
1. In addition, based upon the pricing information furnished by The DRI-EAZ COMPANY the normal price for water extraction is:
FROM CARPETS $0.20 to $0.30 per square foot
FROM MOP WATER FROM FLOORS $0.10 to $0.20 per square foot
2. According to CLEAN CARE SEMINARS a price guide for water extraction is as follows:
ROUTINE EMERGENCY WATER EXTRACTION $0.15 to 0.20 per square foot
FROM MOP WATER FROM FLOORS $0.10 to $0.20 per square foot
3. According to UNSMOKES MOISTUREX ADVANCED WATER DAMAGE RESTORATION MANUAL a price guide for water extraction is as follows:
ROUTINE EMERGENCY WATER EXTRACTION $0.15 to 0.20 per square foot
FROM MOP WATER FROM FLOORS $0.10 to $0.20 per square foot
Additional pricing guide lines could have been quoted for this report, but their numbers are similar to the ones above.
THE INSPECTOR'S ANALYSIS
Several factors are considered for charging more than the regular fees for water damage services. Weekends and holiday calls are reasons to charge over time rates adjustments and May 12, 1996 was a Sunday and Mother’s Day. It should be noted that the west coast charges more than other parts of the country. However, there are problems with some of the prices charged by ACME CARPET CLEANING.
The one dollar per square foot pricing for water extraction is higher than industry standards. Also, the price for extracting water off the tile floors is less than that of carpet. If the holiday pricing were calculated into the pricing at the highest rate of 60% the result would be as follows:
366.7 hard surface square feet $0.48 per square foot $176.02
283 carpeted square feet $0.32 $90.56
The charge for 1.) pad removal, 2) carpet pulled, and 3) carpet cleaning were all based upon 635 square foot pricing. However as it has already been pointed out in the drawing, there were only 382 square feet of carpet at the time of the damage. Thus there were over charges based upon square footage or yardage that equal to:
pad removal $102.50
carpet pulled $102.50
carpet cleaning $64.50
The pricing for 1) travel, 2) furniture moving, 3) disinfecting, 4) air movers, and 5) carpet cleaning fit the highest pricing recommended based upon the 60% adjustment of the highest prices found in the guidelines.
EQUIPMENT PLACEMENT - Based upon the layout of the carpets, three air movers were needed to do the drying job. Since there was no airmover placed in the storage room the loss of the carpet due to delamination is a highly probable result.
The amount of carpet in this area was calculated to be 99.5 square feet. As noted in the S500 STANDARDS it says "Give consideration to closets or small storage areas where airflow may be restricted." Also under the section marked ‘Dehumidifiers’ it says "Rapid dehumidification of the air in water damaged structures is essential to minimize substantial secondary damage to property and materials". When adding all this square footage it is evident that the airmovers used were not adequate to do the drying job.
The standards specifically say that "do not allow carpet to flap" thus the second section of carpet in the show room has been severely damaged. The amount of carpet in this affected area was calculated to be 157 square feet.
Based upon the moisture content of the walls and the yellowing that took place there should have been an inspection and treatment done on the wall. However, at the time of this inspection, restoration had been performed by another company and there was no odor noticed. Additional testing would be required to make an assessment of what was happening inside the walls.
CONCLUSION
The restoration practices on the work in question are not in compliance with industry standards with respect to:
1. placement of airmovers
2. not securing the carpet end after placing airmovers
3. not placing dehumidifiers and improper drying of:
- tile flooring
- walls
There has been improper pricing with respect to water extraction of:
1. carpet
2. tile
There has been improper unit pricing or measuring with respect to:
1. carpet cleaning
2. carpet pulling
3. pad removal
There has been high but legitimate pricing with respect to:
1. travel
2. furniture moving
3. disinfecting
4. air movers
5. carpet cleaning