January Newsletter

Southern Certified Contracting , LLC Florida Building Inspections, LLC
FL License #’s CGC 1518616, HI 123, CCC 041300
Office: 561-347-2266	January 24, 2011
Florida Building Inspections has joined with Southern Certified Incorporated (commercial and residential roofing) to create a new company: Southern Certified Contracting; General Contracting, Roofing and Emergency Services Divisions for all of your construction needs. Southern Certified is a one stop shop for Home & Commercial Inspections, Wind Mitigation Inspections, Mold and Air Quality Investigations, Chinese Drywall Consultations and Insurance Damage Reports.     Contents Section 1:   STATE FARM DROPPING HOMEOWNERS – ALMOST COMPLETE Section 2:  FPL – TROUBLES WITH ENERGY SAVING ROOF COATINGS   Section 3:  GLOBAL WARMING – HOW LONG TILL IT AFFECTS YOU             Section 4:   LOWERS HOME PRICES – WHY NOT  LOWER INSURANCE RATES Section 5:   WHEN YOU BUY INSURANCE – WHAT YOU BUY IS A PROMISE Section 6:   CONSTRUCTION INSPECTION FAIL SLIDE SHOW                 Additional Information:  ABOUT FBI AND SOUTHERN CERTIFIED

Section 1: State Farm in final phase of dropping homeowners insurance policies by Jeff Harrington  January 5, 2011, St. Petersburg Times If you’re a homeowner still covered by State Farm, cross your fingers. You should find out within the next few weeks if you’ve missed the purge by the state’s biggest private property insurer. State Farm is in the final stage of notifying 125,000 homeowners across Florida that they’re being dropped, a process that began nearly a year ago and has pushed thousands into the state-run insurer of last resort, Citizens Property Insurance. In tandem with State Farm’s shrinkage, Citizens Property Insurance has been swelling dramatically. As of Nov. 30, Citizens had nearly 1.3 million policies statewide, up more than 200,000 from a year ago and up 100,000 in just four months. The bigger Citizens becomes, the more all Floridians are at risk of heavy payouts after a major hurricane. That’s because under state law, all insured Floridians can be assessed to cover catastrophic damage claims with Citizens that the insurer cannot afford. Florida insurance regulators a year ago were hopeful that a group of small, Florida-based insurers – not Citizens – would pick up most of the State Farm policies being shed. Even with the cutback, State Farm will remain the largest private property insurer, ahead of Universal Property & Casualty.

Section 2: Industry Group Sees Dangers in Coating of Asphalt Roofing January 4, 2011 The application of white, “cool-roof” coatings to asphalt-shingle roofs has gotten a Florida electric utility in hot water with some homeowners due to allegations that the coatings caused roof deterioration and leaking, as reported Tuesday in Durability + Design . The National Roofing Contractors Association‘s (NRCA) director of technical services, in an article published early last year, cautioned that field application of coatings to asphalt-shingle roofs may be asking for trouble. “The fact is, asphalt shingles-are not designed to accept or require field-applied surfacing,”  The use of white, solar-reflective coatings often proves beneficial in reducing roof temperatures and contributing to lower cooling-energy demand. But the application of such coatings has been blamed for roof deterioration and leaks in a number of homes in South Florida, where the paint jobs were paid for in part with rebates offered by Florida Power & Light. The utility is a target in a lawsuit filed by several homeowners who hired contractors to apply the coatings, the result of an FPL program aimed at helping customers reduce energy use. (See FPL sued over program aimed at saving energy.)  The roofing industry is aware of a number of issues that could have negative consequences for field application of coatings over asphalt-shingle roof systems. Anyone considering this type of application should be aware of the concerns so they can weigh them against the benefits claimed in coating product promotional materials. Generally, it’s viewed as asking for problems. Shingles were never designed to have anything else applied to them.

Section 3: Finding the Fingerprints of Climate Change in Storm Damage — a Very Long Detective Story By Evan Lehmann – ClimateWire January 4, 2011 Hurricanes could become more prevalent with climate change, but the economic pain they deliver might not be recognized as man-made for 260 years. That means smashed homes and ruined roads may not be attributable to greenhouse gases for centuries, according to new research. The researchers also warn environmentalists and policymakers against making claims that damage from Hurricane Katrina and other storms are rising from carbon dioxide emissions. Insurance companies that promote climate change as a reason for rising prices could also lose credibility. The researchers “urge extreme caution in attributing short term trends (i.e., over many decades and longer) in normalized US tropical cyclone losses to anthropogenic climate change.” Finding the signals in weather cycles The results indicate that future hurricane damages won’t produce a tangible “climate signal” for at least 120 years, and perhaps not for 550 years. The average time before a signal might be seen is 260 years, according to the combined findings of an 18-model ensemble used by the researchers. In that year, 2271, climate change is expected to increase damage by 106 percent, more than double. So why wouldn’t climate-related damage rise at the same rate as hurricane frequency? Because buildings and infrastructure are not located uniformly along the country’s coastlines, and some are constructed more robustly than others. A climate-influenced storm, in other words, could rip ashore in an unpopulated area of Florida and do little damage. That dilutes the climate signal in economic losses. A tool to restrict insurance premiums? He also has a warning for insurers and climate modelers: Don’t overplay current climate risks. “Because your credibility is hard to gain and easy to lose in the area, and they don’t want to be seen as going beyond what the science can support,” he cautioned.

Section 4: Home price is down, so why not insurance? Value of housing may be different from rebuilding costs By Allison Linn January 3, 2011, Today. MSNBC.com If you’re a homeowner, chances are your house is worth less than it was five years ago. But you could still be paying more to insure it. Despite the deep housing bust of the last few years, the cost of rebuilding a damaged home – in other words, what you pay insurance for – has not changed much, according to industry experts. That means that unless you have reduced coverage or increased your deductible, chances are you are paying as much or more to insure your home as before the housing bust. “The price of homeowners’ insurance is based on the cost to repair or rebuild your home. The price of a home is based on the market value of that home and the land upon which it sits,” said Robert Hartwig, president of the Insurance Information Institute. Although the recession has been particularly brutal for the construction industry, Hartwig said that hasn’t necessarily meant the overall cost of labor and materials needed to rebuild a home has gone down. After rising nearly 62 percent between 2000 and 2007, the average premium for homeowners insurance did dip by nearly 4 percent in 2008, to $791, according to the most recent data available from the National Association of Insurance Commissioners.   But Hartwig said that dip was not due to a drop in the cost to insure a home. Instead, he said many homeowners did things like increase their minimum deductible or drop extra coverage options in order to save a little bit of money on their premium. “We saw people do things to pinch pennies any way they could,” Hartwig said. Although it’s tempting to try to reduce your coverage amount when your home price falls, that can be a costly mistake, said Tobie Stanger, senior editor at Consumer Reports. “This is one thing we always say to the consumer: When you see your home value going down, don’t assume that you can drop the value of your homeowners’ insurance,” Stanger said. In a topsy-turvy housing market like we’ve seen in the past few years, it’s possible that the cost to rebuild your home is actually more than you could sell it for, said J.D. Howard, executive director of the Insurance Consumer Advocate Network. Very regional These days, Florida, Texas and Louisiana are among the most expensive states to buy homeowners insurance. Check your bill, shop around Still, experts say that doesn’t mean you should accept a big jump in your insurance rate when you get your next bill. Stanger recommends that consumers look carefully at the bill to see why it has increased. You also might want to check if you can reduce your rate by making home improvements. While a really great insurance rate may be alluring, you should be cautious in accepting a new policy purely based on price. Howard recommends checking consumer websites and your state department of insurance website to make sure that your insurance carrier will treat you well in the event of a claim. “When you’re buying insurance, all you’re buying is a promise,” he said.

Section 5: Why should we trust insurance companies? By Gary Farmer January 2, 2011, Sun Sentinel Earlier this month, the insurance industry spin machine started up again. If you believe them, every woe in our state – from traffic in South Florida to the cold weather in the Panhandle – is somehow the result of lawsuits. Some even call Florida a “judicial hellhole,” claiming that Florida can lower costs for consumers and create jobs simply by reducing lawsuits. Well, ask yourself this one question: Why in the world would you trust anything your insurance company says? Here are the facts: 1) “Trial lawyer” lawsuits make up a mere fraction of lawsuits in Florida. In 2009, nearly 90 percent of all lawsuits were either business versus business suits or home foreclosures. 2) “Malpractice” lawsuits make up an even smaller fraction. In 2009, out of the 547,194 lawsuits filed in Florida, just 1,286 were related to “professional malpractice”- including medical malpractice. That’s less than 0.4 percent of all civil court cases. 3)”The percentage of ”trial lawyer” cases is dropping. Over the last decade, the percentage of civil cases related to malpractice, auto accidents and product liability has shrunk as corporate litigation and foreclosures are skyrocketing. Punitive Damages are very rare and for only the most egregious cases. In 1999, Florida enacted restrictions on punitive damages and capped the limits in most cases. Perhaps the most outrageous proposal is the insurance industry’s demand that we further restrict the rights their customers have when they act in bad faith. Small businesses and individuals buy liability insurance to protect themselves from the potential for a catastrophic lawsuit against them. But too often, when the worst happens, the insurance company fails to promptly settle the claim. Now the insurance customer – who could have been fully protected if the insurer had acted in good faith – ends up losing everything they have worked for because the insurance company did not act in good faith. If the insurance company acts in bad faith in failing to settle these horrible claims when they should, who should pay that excess?   If there is a lawsuit problem, it is because out-of-state corporations use our courts to fight with those they contract with, and the banks use them to foreclose on homes – not because consumers use the courts to protect their own rights when negligent behavior has caused harm to them or their family. Don’t allow a dishonest industry to manipulate the truth just to avoid accountability to consumers.   Gary Farmer is an officer with the Florida Justice Association and attorney in Broward County.

Section 6: Construction Inspection Failures 

December Newsletter

Southern Certified Contracting, LLC  Florida Building Inspections, LLC
FL License #’s CGC 118616, HI 123, CCC 041300
Office: 561-347-2266	January 2, 2011
Florida Building Inspections has joined with Southern Certified Incorporated (commercial and residential roofing) to create a new company. Southern Certified Contracting is a one stop shop for Home Inspections, Wind Mitigation Inspections, Mold and Air Quality Investigations, Chinese Drywall Consultations and reports for all phases of Insurance Damage. We also have General Contracting, Roofing and Emergency Services divisions for all of your construction needs.  Contents Section 1: Hurricane predictions – how did they perform this year?. 1 Section 2: Thermal Image Inspections. 2 Section 3: Insurance Cost Heading Higher 2 Section 4: New Wind Mitigation Inspections cause concern. 2 Section 5: Full Service Contracting. 3 Section 6: Trends and Demographics. 4 Additional Information: Get Southern Certified. 5 Section 1: Hurricane Predictions – How did they hold up this year? The Washington Post (Washington, DC) Hurricane season in 2010 — Third most active season in modern times By Greg Postel 2010 Hurricane Season Forecasts Named Storms Hurricanes Major Hurricanes AccuWeather – Joe Bastardi 15 5 2 or 3 Colorado State University 15 8 4 Tropical Storm Risk, Inc. 16 8-9 4 WeatherBug 12-17 6-9 3-4 NOAA 14-23 8-14 3-7 Forecast Average 16 8 4 2010 Season Actuals (to date) 19 12 5 Long-term Average 10 6 2 Section 2: Thermal Image Inspections Inspection, documentation, reference, follow-up, proof. Southern Certified Contracting and Florida Building Inspections offers Infra red scanning technology for roof, building envelope, water damage, mold, electrical and other building issues. Look non invasively for extent or cause of damages with full color photos that document the damage from where it presents and follows it back to the source. Section 3: Insurance costs keep rising Florida homeowners haven’t dealt with a big hurricane since 2005, but property insurance rates continue to climb.  Why, customers ask, are premiums skyrocketing by double digits for no apparent reason? Critics say it’s simple price gouging, a desire of insurance companies that embellish fraud as an excuse to jack up rates. Insurance executives say it’s a mix of unprecedented deception by insurance adjusters and customers, and recent rules unkind to the industry. No matter what’s to blame, it’s clear homeowners won’t get a break on their insurance prices anytime soon. From January through August this year, 50 homeowners insurance rate increases were approved in Florida with an average increase of 12.5 percent, according to documents provided by the State Office of Insurance Regulation. The increases were for multi-peril insurance. The increases ranged from as little as one-10th of 1 percent to as much as 29 percent. “Fifty-two Florida-based property insurers lost $153 million through the third quarter of 2009 with no storms,” said Dick Brown, President and CEO of local insurance agency Hayward Brown, citing numbers from the Florida-Based Property Insurers CEO Group.  Jeff Grady, President of the Florida Association of Insurance Agents, said, “I think it’s about as bad as it can get right now.” Rate Increases Florida has approved 50 property insurance rate increases this year through August at an average hike of 12.5 percent. Here are some of the highest: Northern Capital Insurance:  29 percent Omega Insurance:  20.8 percent Homewise Insurance:  28.8 percent Florida Peninsula Insurance:  19.8 percent American Mercury Insurance:  24.8 percent Castle Key Insurance:  18.7 percent Hartford Insurance:  24 percent Castle Key Indemnity:  17.8 percent Tower Hill Preferred Insurance: 21.3 percent Capitol Preferred Insurance:  17.2 percent Other insurance companies still have rate-increase proposals pending. A sampling of the proposals, which could be higher or lower if approved: Nationwide Insurance of Florida: 14.6 percent Sunshine State Insurance: 25 percent Electric Insurance: 14.4 percent SOURCE: Florida Office of Insurance Regulation Section 4: INSURERS REVOKING CREDITS FOR HURRICANE PROOFING Many Florida homeowners shelled out thousands of dollars to fortify their homes against hurricanes in recent years to qualify for insurance discounts.  Some got them – for a while. This year, some homeowners are feeling the impact of changes to state laws that, in effect, reduce or erase many insurance discounts. Howard Goldberg’s windstorm insurance premium dropped 33 percent in 2009 when St. Johns Insurance accepted an inspection report that showed his Delray Beach house has shutters and steel-reinforced garage and front doors. His premium went up slightly when he renewed in December. The real shock came eight months later, when St. Johns re-calculated his rate, rejected some of the improvements, and raised his premium 69 percent, retroactively. Insurers said homeowners were fraudulently claiming improvements for discounts. Changes that took effect this year make it a crime for inspectors to provide false information about upgrades and require inspectors to include photographs of each qualifying upgrade and a signature of a licensed engineer, architect or contractor to verify the accuracy.  Some insurers have started going back to verify the discounts are legitimate. State-backed Citizens Property Insurance, the state’s largest home insurer, began re-inspecting homes last year to verify the $700 million in discounts it provides annually. “Our goal for re-inspections is to have the features so well documented that the construction feature is apparent,” said Candace Bunker, spokeswoman for the state-backed insurer.  “If a homeowner complains and believes we are taking away a legitimate credit, we work to make sure that we have correct information, that our action is warranted, and to communicate to the policyholder about how any deficiencies can be remedied if they wish to continue to receive the credit.” State leaders have stressed the importance of making homes stronger and invested more than $200 million of taxpayer money to do so.  Bob Hunter, Insurance Director of the Consumer Federation of America, says regulators should intervene before people start doubting that insurers give discounts. Julie Patel http://www.sun-sentinel.com/business/fl-florida-hurricane-discounts-20101001,0,7291914.story Section 5: Full Service inspections and contracting Southern Certified Contracting and Florida Building Inspections has a full service approach to your building needs. We offer Licensed Home Inspection Service to assist buyers, sellers, real estate agents and insurance agents. We understand real estate transactions and our accurate reports are there to help put deals together, not tear them apart. As Citizens-Approved Wind Mitigation Re-inspectors we are on the cutting edge of what is required for your insurance needs. We offer an owners consulting program for assistance in getting lost credits re instated. SCC is certified to test for Mold and Chinese Drywall, and we have the expertise to repair any damages found quickly and economically. Certified infrared photography can be used to document existing conditions, extent of roof damage or water intrusion. Full Service Repairs and General Contracting for single family residences or commercial structures. Full Service Roofing; including inspections, maintenance, repair and reroofing. Section 6: Information you can use Florida Trend Interactive State Map and Region Statistics September 21, 2010 Go To:  http://www.floridatrend.com/wide_article.asp?aID=53630 Additional Information You are receiving this newsletter because we have met either professionally or at a recent trade show or event. If you wish to be removed from future correspondence, please email info@FBInsp.com and you will be removed immediately. Southern Certified Companies Partners: Gary Madsen, Duane Hennarichs, Richard Kurzman Licenses: Certified General Contractor: Southern Certified Contracting FL CGC # 1518616 Certified Roofing Contractor: Southern Certified Incorporated FL CCC # 041300 Florida Home Inspector: Florida Building Inspections FL HI # 123 Contact Info: Phone:    561-347-2266 Address: 2241 NW 22nd Street Pompano Beach, FL 33069 Email:     Gary@Southern-Certified.com

How to prepare to keep your Windstorm Mitigation Credits

Home insurers revoking discounts for hurricane-proofing

Many Florida homeowners shelled out thousands of dollars to fortify their homes against hurricanes in recent years to qualify for insurance discounts.

Some got them – for a while. This year, some homeowners are feeling the impact of changes to state laws that, in effect, reduce or erase many insurance discounts.

Howard Goldberg’s windstorm insurance premium dropped 33 percent in 2009 when St. Johns Insurance accepted an inspection report that showed his Delray Beach house has shutters and steel-reinforced garage and front doors.

His premium went up slightly when he renewed in December. The real shock came eight months later, when St. Johns re-calculated his rate, rejected some of the improvements, and raised his premium 69 percent, retroactively.

Insurers said homeowners were fraudulently claiming improvements for discounts. Changes that took effect this year make it a crime for inspectors to provide false information about upgrades and require inspectors to include photographs of each qualifying upgrade and a signature of a licensed engineer, architect or contractor to verify the accuracy.

Some insurers have started going back to verify the discounts are legitimate.

State-backed Citizens Property Insurance, the state’s largest home insurer, began reinspecting homes last year to verify the $700 million in discounts it provides annually. “Our goal for re-inspections is to have the features so well documented that the construction feature is apparent,” said Candace Bunker, spokeswoman for the state-backed insurer.

“If a homeowner complains and believes we are taking away a legitimate credit, we work to make sure that we have correct information, that our action is warranted, and to communicate to the policyholder about how any deficiencies can be remedied if they wish to continue to receive the credit.”

State leaders have stressed the importance of making homes stronger and invested more than $200 million of taxpayer money to do so through the My Safe Florida Home program from 2006 to 2009.

Bob Hunter, insurance director of the Consumer Federation of America, says regulators should intervene before people start doubting that insurers give discounts.

“There can’t be any question that they’re being applied fairly,” Hunter said. “I think the insurance commissioner should immediately look into these kind of allegations and…reverse any of these decisions” to lower discounts if they’re wrong.

By Julie Patel http://www.sun-sentinel.com/business/fl-florida-hurricane-discounts-20101001,0,7291914.story

What are they looking for if you get selected for a reinspection?

The inspector will look for several things in the reinspection process. Keeping your credits is all about verifying what credits you have and having the right paperwork available.

Is the structure reinforced? The inspector is supposed to check with a metal detector in at least one location per side of the house to see if there are reinforcing rebars present in the masonry walls.

Roof geometry. Is the roof a full HIP roof or does the roof have gable ends or is a part of the roof flat?

A full hip roof has been shown in wind tunnel tests to better withstand hurricane force winds than a gable or flat roof. One important point is that a flat roof that is not attached to the rest of the roof structure such as some carports or Florida rooms should not be counted. Confirm with the inspector what he is figuring as part of the roof area.

Roof covering.   The roof covering has to meet 2 requirements.

First, it has to be installed per the Florida Building code. Have a copy of the building permit available for the inspector.

Second, the roof material has to have a Miami Dade product approval or Notice of Acceptance (NOA). Only shingle roofs and metal roofs have met this second test. That means that all flat roofs and all TILE roofs do not meet with the Office of Insurance Regulation (OIR) requirements. If you don’t have an NOA for the roof your roofer or his supplier should be able to assist you in obtaining one.

Verify hurricane opening protection.

Are ALL  openings protected with devices that can be VERIFIED as being Miami Dade Product approved? Many hurricane windows, doors, shutters or storm panels have manufacturers data labels or stickers on them. Be aware of where these stickers are – show them to the inspector. Have a copy of the Notice of Acceptance (NOA) number on the stickers available for the inspector. There should be a separate NOA for each type of window and door opening. So a house with sliding glass doors, fixed windows, casement windows, a glazed panel in the front door and a French door would have 6 NOA’s for glazed opening protection. The original installer or supplier of the windows and doors should be able to assist with obtaining the NOA paperwork if the homeowner can’t find the stickers on every opening.

Even one unprotected door or window is enough to reduce the hurricane credit for that category. An unprotected garage door with windows or lites across the top, or an unprotected front door with a glass insert can remove all of the credits for both glazed and unglazed openings.

The attic is important in reinspections.

The inspector should check 4 trusses with a metal detector to check the nail spacing where the roof deck is attached to the trusses. Checking 4 trusses  assures that the nailing of both the edge of each sheet of plywood and the center of each sheet has been correctly nailed. There is not much a homeowner can do about this except make sure that 4 trusses in a row are surveyed and marked so they can be re checked later.

The inspector should also find a nail which has missed the truss. these nails, called shiners, should be measured. 2″ of nail showing through the plywood deck is an 8d nail and 1.5″ is a 6d nail. Again there is not much a homeowner can do about this. One thing that is important is that the nail may have been driven at an angle. If it was driven at an angle less than 2″ showing may still be an 8d nail. Confirm this with the inspector.

If the roof has gables the inspector needs to verify how they were constructed. Are the gables masonry all the way up or are they frame construction? If they are frame construction, are they braced? If this becomes an issue the homeowner may need to contact an engineer to verify the construction details.

How is the roof anchored to the rest of the building?  Generally the roof is secured either with a “wrap” or “clip”. What the carrier wants from the inspector is a photo showing not just the attachment device, but the number of nails in the wrap or clip. The inspector needs to crawl all the way to the outside edge of the attic and take a photo of the attachment. The problems that arise are when the attic is small and dark and the inspector can’t get a good photo of nails securing the wrap or clip.

If the carrier removes any wind mitigation credits unreasonably it is possible to get them back. Generally all a homeowner has to do is provide the correct back up documentation. Copies of permits, NOA’s and either better photographs or professional letters from a contractor, window protection installer or licensed roofer can be used to correct any disputed credits that are removed. If a credit was removed that should not have been removed the carrier should give back the credits retroactively.

Hurricane Season & Chinese Drywall

In his decision on the Chinese Drywall Class action suit, Judge Fallon refers to the deteriorated electrical systems as “Corrosion on active residential wiring is a violation of National Safety code as well as the safety and building codes of the various states.” (page 37-38). So, here is the technical question of the day. Sure, insurers have ducked the issue of whether Chinese Drywall is a covered peril for purposes of insurance. In other words, just because you have Chinese Drywall in your house it is not defacto a reason that your insurance will pay a claim to remove it.

But, how about in the instance of another claim against your insurance? For example what is gong to happen when there is a flood? The contractor removes a piece of drywall and there on the back is “Made in China”. Now the problem gets more interesting. There may not even be anything in the building code that says that upon finding Chinese Drywall in a house that you must rip it out. But, if a contractor finds Chinese Drywall, and if he knows or should know that Chinese Drywall causes corrosion of electrical wiring and components and if leaving this corrosion is a code violation – then what?

There are a couple of examples in the insurance industry of similar situations. It is illegal to use asbestos in building products in your home. Yet, many homes were built before the hazards of asbestos were realized. It is not illegal to leave that asbestos alone and in place in your house. (It should be encapsulated if possible and should be left undisturbed so that it dose not turn into easily inhalable dust). And there is no claim against your insurance if you find that you have asbestos in your house. However, if there is an insurable loss, say a fire or flood, and the asbestos becomes friable (that is easy to inhale), or if the materials that contain asbestos, such as floor tile, siding or roof shingles, are damaged by the event and need to be replaced, then your insurance will pay to remove the asbestos under the most stringent of federal guidelines. Not to do so would be a violation of Federal and State safety and building codes and could be a huge liability if it is left in place.

The same thing is true for lead. It may be a little different situation for mold but that is another story.

So, if you have Chinese Drywall in your house and you suffer an insurable loss, and as a result of your insurable loss the Chinese Drywall is discovered and is damaged and therefore needs to be replaced, now the situation becomes similar in a lot of respects to Asbestos and Lead. The contractor should know that there are likely code violations to the electrical system which will need to be addressed. And looking at Judge Fallons opinion, his solution is to remove all of the drywall and all of the electrical system in the house. So, unless you have had your insurance canceled already, or unless your carrier has sent a policy revision that excludes Chinese Drywall and any results of the presence of Chinese Drywall, it looks like there might be a covered claim against your homeowners insurance.

But, not so fast, in the case of Asbestos or Lead, there are a couple of significant differences. Just the presence of Asbestos or Lead does not cause other building components to fail. And that is what is happening with Chinese Drywall. It is the effects of the chemicals in the drywall that are creating the corrosive atmosphere. That may be a little different. For example, if you knew that you had Chinese Drywall and knew that you were creating a corrosive atmosphere and yet did nothing to resolve the issue there could be areas where your insurace would not address the resulting damage.

But, if you were unaware of the presence of CDW or if you removed the CDW and didn’t get it all and it was only when the contractor found the problem as a result of a separate insured loss, I see it as being pretty comparable. So, it would be worth while pursuing.

Don’t think that the carriers are going to roll over easily on this. A very minimal loss could turn into a huge deal. Judge Fallon is figuring $84.oo a sf to remediate CDW and his protocol is to remove all drywall in a suspect house or structure. Carriers will most likely fight that tooth and nail.

Also, contractors are going to have to be knowledgeable about what is going on and what the possible liabilities  are for themselves as well as the home owners. Which really brings us to today’s topic. Chinese Drywall and the upcoming Hurricane Season.

Sooner or later a large storm is going to hit Florida. There will be lots of wet walls that need to be torn out. Lots of Chinese Drywall will be uncovered. We need to be prepared.  Homeowners, condo owners, property managers etc need to be aware of the ideas outlined above.

Contractors need to be aware of the need to identify the presence of Chinese Drywall in structures where they work. If they don’t note the CDW and just cover up walls etc., leaving corroded wires in place the liability from a future electrical failure or  fire fire may well rest in part with them.  Inspection for CDW needs to be part of any evaluation of any insurance claim. The presence of CDW needs to be noted and reported at once to the homeowner and insurance adjuster. The possibilities of code violations and safety issues needs to be transmitted to everyone clearly and effectively. A clear remediation protocol based upon Judge Fallon or CPSP/EPA needs to be suggested. If not I fear that the contractor will be at fault.

After a major disaster such as a hurricane it is sometimes weeks or months before an owner even sees an adjuster. It is sometimes years before a claim is finally settled. The more complex the claim, the longer it generally takes. And claims such as these are going to be complicated. Get ready for the long haul.

Here is where the analogy with mold comes in to play. Even if mold is excluded from a policy, there may be instances where if the carrier is so slow in responding as to be considered negligent, and a s a result wet building materials become moldy, then there may be so me coverage afforded to the homeowner.

The similarity is that even if there is no sign of damages being caused by Chinese Drywall right after a loss, if it is a hurricane situation and the property is wet and without power in a hot climate the actions caused by the CDW can be accelerated. That could start the dace between the homeowner and insurance carrier all over again. The carrier blaming the owner for not acting quickly enough to resolve the problem and the home owner feeling like they were at the mercy of the insurance carrier because there is not a specific way to deal with these situations.

Overall, everyone better be ready when the wind blows and the rains come because this is going to turn into a real mess unless someone gets the process into high gear and comes up with some guidelines.

First Award Made in Chinese Drywall class action suit

Judge Fallon made his award public today in the first Class action lawsuit award for damages caused by Chinese drywall.  $2.7 Million dollars were awarded to 7 families whose homes were affected by CDW. So, finally someone has received money for all of the problems caused by this stuff.  See this link;  http://www.hausfeldllp.com/content_documents/9/DaubertOrder.pdf (there are tons of links to this document, this is just one of them).

There are still two questions:

1) Is there bacteria? Saber Technologies says “Yes” In response to questions from Drywall Report, Saber responded “Just to clairify, the sheetrock is passed through an oven that is at 500 degrees to dry out the board and remove excess water. The board itself never gets up to this temperature, due to the evaporation of the water. The actual maximum temperature of the board is closer to 212 F. The bacteria described are thermophilic, and thus can survive these temperatures.” So according to their studies it is possible that bacteria are still present in CDW homes.

Bacteria can grow and migrate to other mediums such as wood and Concrete block, so, even complete removal of CDW would not necessarily remove all threats. Sabre has recommended a process of tenting the house and filling it with Chlorine Dioxide gas which would neutralize and harmful CDW chemicals and also render harmless any bacteria in the structure.

Of course, the CPSP reported last week that they could not confirm the Sabre tests in their labs. So the question remains open.

2) Can the remaining material hold residual “trapped” gases which could reappear at a later time? This process called Desorption has been noted in houses that have been completely remediated previously. Building Envelope Science Institute has added a  step called Thermal Desorption to their protocol. this process of heating the house to in excess of 110 degrees is supposed to pull trapped sulfur gases out of wood and masonry and evacuate them from the house into the surrounding atmosphere where they are harmlessly dispersed.

Neither of these ideas is too far fetched. Nothing could be worse than to completely remediate your house for hundreds of thousands of dollars and find out later that there is still a problem.

If you are considering remediating a Chinese Drywall house my advise is that it still ain’t over.

The first steps are there, 1) What is the problem with CDW. 2) How to identify the problem. 3) A protocol for removal.

What is missing are 3) A clearance test to be sure that the remediation was done successfully. and 4) A warranty program such as proposed by National Construction Warranty corporation’s preliminary proposal.

Stay tuned, we are getting closer to a solution.

Consumer Product Safety Commission report on Chinese Drywall

Over the past few days a lot has been made of the Consumer Product Safety Commission (CPSC) report on Chinese Drywall (CDW). What it boils down to is this. If you know that you have CDW, take it out. And while you’re at it, take out all electrical wires, fire and smoke detection equipment, fire sprinklers and any other life safety issues.

The report shows studies that indicate an overall average of 30 times more sulfur compounds being detected  in CDW samples than with domestic drywall.

The report leaves as inconclusive whether there is any basis for bacterial contamination. The CPSC report refers specifically to the Sabre labs report mentioned in a previous blog post. The Sabre report showed extremely high concentrations of bacteria. The CPSP report leaves the bacteria issue as inconclusive.

One of the things that the report is thin on is  what to do about any non Chinese Drywall that may be present.  The report essentially says that you can leave any non Chinese Drywall in place, but it is at your own risk. The CPSC report does not address how to deal with the electric, fire safety, smoke detectors etc. that are wired behind the saved drywall.

Another point the CPSC report does not address AC coils or plumbing pipes because these items are not considered life safety threats.

Overall, the CPSC report is a big step forward, but it is a preliminary report and it leaves a lot of questions unanswered for later.

For now, it looks like the best protocol is complete removal of all drywall and associated wiring, plumbing and HVAC.

I wouldn’t discount the Sabre  study findings on Bacteria at this point.  I would plan on using anti microbials of some sort on the remaining structure.

One thing that I agree with The CPSP report on is: Know your contractor and try to understand all of the implications of what you are going to do if you are planning to remediate a CDW house. Nothing could be worse than spending all of your resources on remediation and then finding out that something was missed. Chances are you won’t get a second chance.

Another new twist on CDW – Bacteria

Until recently there has been speculation on whether Chinese Drywall problems were caused by chemical compounds in the drywall itself, or if there was another culprit lurking out there. Samples of CDW have been analysed for mold spores and have come up positive. But not every time. New research shows that there may be an even larger problem involved – Bacteria. If there is harmful Bacteria in CDW then the lid is off as far as health concerns go. Species of Bacteria are the underlying cause for Salmonella outbreaks and Merca is a disease caused by Staff Bacteria. The wrong type of Bacteria can be deadly. Below, find a part of a press release on the presence of Bacteria in Chinese Drywall.

Previous speculation was that the bacterial contamination was only at trace, remnant or even nonviable levels, but the studies reveal that the bacteria is alive and present at 100 to 100,000 colony forming units per gram of Chinese drywall.  Of equal significance, when exposed to conditions similar to those found in the southern United States, these bacteria generate reduced sulfur gases.  This level of bacterial contamination is considered pervasive, and is comparable to levels found in landfills.  With this level of contamination, there would be between 3 million and 3 billion living bacterial colony forming units in a standard sheet of Chinese drywall.

Sulfur in the form of “S8″ has also been shown to be a typical contaminant in Chinese drywall.  The bacterial species identified is well known in scientific literature not only to produce reduced sulfur gases but to store sulfur in the form of “S8″.

The high level of bacterial contamination found embedded in the core of the drywall strongly suggests that the problematic drywall was contaminated by the process water used in the manufacturing process.

How did it get there? Drywall is a water intensive product. Finished drywall or sheetrock has at least 2 quarts of water still present in crystalline form in every sheet. Water is not the same everywhere. And of course water treatment is not the same everywhere either.

This week TIME magazine ran a story on industrial pollution in China. It talked about the massive amounts of toxins that have been hap hazardly dumped into Chinese landfills, garbage dumps and rivers.  It is a fact that China is far behind the United States in environmental controls. Yet, even here in the US there are daily reports about what ends up in our rivers and streams. Today CNN is talking about massive sewage overflows in the Northeast as a result of major flooding.

That is how Bacteria ends up in the water used to make drywall. But, the processing of the gypsum into sheetrock is designed to decontaminate the wet gypsum product.  This is done through heat. Temperatures of around 500 degrees are used to dry and as a by product detoxify drywall during it’s manufacture. If there is a short cut in the process and the drying  temperature is much lower or the drying process is shortened then there is a chance that the finished product may not be totally decontaminated.

So, bad water and a hasty or unregulated finishing process could leave Chinese Drywall with the potential to not only smell bad but also pose a health risk.

This news is good and bad.

First, there are a lot of processing plants in China so not every board of Chinese Drywall contains water from the same source. This may help explain why there are so many different reactions caused by CDW. In addition, it means that not every piece of Chinese Drywall has Bacterial Contamination. Some may have been manufactured with cleaner water. Some may have been manufactured with better controls.

But, if there is Bacterial Contamination then there is a new twist on the insurance front. Bacteria, such as bacteria from a sewage back up in your house are often covered perils in an insurance policy.

Manufacturers may have a greater liability and responsibility to clean up their mess if it is proved that they used deficient manufacturing processes.

The Federal Government may feel greater pressure to step in and help affected homeowners if CDW is a direct health threat.

Finally, there are good established guidelines for dealing with mold and bacteria in buildings. For the most part the removal process would stay the same. Worker protection would be amped up a lot.  Workers would probably fall under the same OSHA category for Personal Protective Equipment as if they were doing a raw sewage clean up. there would be masks and gloves and Tvyek suits and possibly decontamination chambers.

As far as the actual removal goes, this is just a guess, but I would think that anything that could be contaminated by Bacterial spores would have to be removed per EPA guidelines, anti microbial agents would need to be applied to any remaining structure and salvage of building components such as cabinets, porous tile etc would bear a lot more scrutiny before they are re installed.

If there is a positive outcome to this, it would have to be that there are clearance protocols already in place to give a final OK to the removal of Bacterial Contamination. These tests are performed best by a Certified Industrial Hygienist.

I have always said that the thing most disturbing about the Chinese Drywall mess is that there is not a final clearance methodology. Maybe this will be a step in the right direction.