Publisher’s Note: We love to be the bridge for dialogue, discussions, and different viewpoints within the restoration industry. This article by Graham is in response to another piece recently published in C&R related to three-day drying. We encourage you to read both – and share your thoughts in the comments of this article on social media, or shoot us an email with your thoughts: michelle@candrmagazine.com
Everyone has heard about the cook preparing the roast and being asked why they cut off the ends first. The response was “that’s the way mom always did it.” Later, the opportunity came up and the elderly mom was asked why. She replied,” my roaster was too small to fit the whole roast.” Traditions evolve and the majority just accept that “if it was good for mom, that’s good enough for me.”
Let’s consider how this myth evolved and challenge both restorers and insurance professionals to consider another way that can take much of the ‘fight’ out this debate. In the previous article by Scott Walden, he provided some excellent wisdom. I recommend to keep doing all of that…..and consider this.
History of 3-Day Drying
The ‘cut-off’ on drying equipment rental was in place when I entered the profession over 30 years ago. Nobody could ever explain where, when, or how this policy came about, however it spread like a fire once the insurance companies realized they could control costs that way.
The common understanding was that the drying equipment was ‘capped’ because “everything should be dry in that time frame.” If there were exceptional circumstances, you generally needed to inform/explain to the adjuster and most were somewhat receptive in making a reasonable extension. How many times have you heard, the response, “Because this is industry standard.” When asked to provide the standard they are referencing, it is always crickets.
Over the years, untold arguments ensued where restorers wanted more drying time because “we shouldn’t put our equipment in service for free. That’s just not right.” Many adjusters and especially TPAs, having no understanding of the science of drying, actually believed that everything could be dried in three or four days with very few exceptions. Then insert egregious example of the restorer who invoiced more than the replacement cost of the equipment on one job. Or the TPA who responds to a properly documented invoice with, “you should have dried this eight-room basement flood with three fans and one small dehumidifier.”
I believe the intent was reasonable, but the policy was wrong, resulting in rewarding the manipulative on both sides rather than the educated and the honest.
This led to some contractors charging what they thought they could get away with and waiting for the push back. Insurance companies caught many cases of embellishment and rightly they pushed back.
Contractors responded by cutting out everything that couldn’t be dry in three to four days and loading more equipment into the jobs. This sort of worked, but as the bills increased and so did the level of scrutiny.
One possibility for the adjuster/examiner not accepting additional drying is due to the separation of the emergency phase/invoice from the repair phase/invoice resulting in a disconnect in seeing the total picture. The truth is that a properly mitigated emergency may spend $5,000 more on drying equipment which then results in lowering the repair cost by $40,000. A 10X return on additional drying costs is not uncommon and a qualified contractor should be able to show this relationship and cost/benefit to the adjuster.
Over time, the ANSI/IICRC S500 gained traction throughout the industry and this helped tremendously in providing a credible basis for how much equipment was necessary to dry things based on category and class.
The challenge with drying time is that it can seem pretty subjective to the uninitiated. Daily monitoring and adjustments to placement can make a significant difference in how long it takes. It is so much more than just tracking temp/RH. There are many variables that come into play which is why a two-day WRT course doesn’t make you a professional. Malcolm Gladwell talks about the 10,000-hour rule describing how long it takes to get truly good at something, and that’s with good education, good coaching, constant learning and implementing, and making tons of mistakes.
People think that simple comes before difficult. In fact, it’s reverse.
One must persevere through the hard and the awkward to make excellence appear easy.
As has been noted, wood structures are very different from steel and concrete construction. There are numerous good reasons that may cause a significant variation in how long it takes to get back to dry standard.
Humidity Control vs. Drying
The insurance industry and contractors often mistake humidity control for drying. On jobs where asbestos abatement or multiple days of demolition is required, or projects are so large that all contents must first be listed and removed off site, there may be a several day delay before the removal, cleaning, and disinfecting is complete and drying can properly start. In these cases, using dehumidification to drop the humidity to <50% prevents secondary damage caused by excessive humidity. This step requires significantly less equipment than what is required once air movers and heat are added to enhance evaporation for structural drying. In other cases where the HVAC system requires significant work or replacement, temporary ventilation controls must be established for the project which operate continuously until the HVAC system can be re-commissioned. Whether one day or six months, this is a completely separate issue from drying.
So What Makes Sense?
Let’s look at the equipment rental industry and their policies for a minute. If there is any ‘industry standard’ that applies to our conversation, this should be where you find it. Statista’s Research Department reported on July 15, 2022 on the North American equipment rental market size from 2000-2024. Between 2000 and 2019, the North American equipment rental market grew continuously, reaching roughly $61.5 billion (USD) in market size. In 2020, the market size dropped to $53.2 billion due to the coronavirus pandemic. This dwarfs the drying equipment rental paid for by insurance companies for water damage claims.
In comparison, insured water damage claims in North America range from $5-20 billion each year depending on your source. If you consider that the drying equipment is only 10-20% of the total claim, the insurance industry is hardly setting any standards for rental equipment.
It is standard in the equipment rental industry that an item is charged a daily/weekly/monthly rate. For equipment that is used regularly and has a typical life of three to five years. It is typical that three to four days equals one week, and three weeks equals one month. Also, for the purpose of rental billing, one month equals four weeks (not a calendar month).
The payback on the capital cost of the equipment/tool is typically between 30-40 days at the daily rate. This means the typical item should be paid back within the first year.
Drying equipment is a specialty item that can sit on the shelf for months at a time and then only get deployed 20-30 days a year. For most restoration companies, 10-25% of their drying equipment is in play for the majority of the time, but to manage storm events, they are warehousing another 75+%. This takes up valuable warehouse space which is getting increasingly more expensive everywhere. This is why drying equipment rental rates are rented at a daily rate that covers the capital cost in 20-30 days. It doesn’t get used as much, has a higher storage cost, so the rate goes up.
This is normal for any tool or equipment that is used infrequently. In a few examples, the item may be amortized over one project because it might be a year or two before it is needed again.
Are the insurers really so naïve that they believe the three-day myth they are feeding to restorers? There may be some who do, but I believe the policy came about because some smart person thought they should look at the huge rental industry to see how they do it and realized that three or four days equals a week.
They also learned from benchmarking their claims experience, that the vast majority of water damage claims (not hurricane surges or river floods) can be brought back to dry standard within seven days, thus making the three to four-day cap the weekly rate.
Yes, there are a small but legitimate percentage of claims that take longer than a week to dry. In those cases, a legitimate contractor can articulate why and a fair adjuster will accept that the clock starts ticking again until it hits the weekly rate again.
I’m willing to bet that by considering the 3-4 day cap as a weekly rate, and moving the line to day eight, you eliminate the debate for more than 70% of your losses where these arguments live.
This alignment of policy with the equipment/tool rental industry makes so much sense and adopting this understanding would remove so much friction in this ongoing debate. And I would call that win/win.