How Much Is Too Much?

By Tom Lackey

How much is too much?  This is a question being asked more frequently about water mitigation bills.  According to the Insurance Information Institute, water damage claims account for approximately 30 percent of property insurance claims.  Of that percentage, the greatest amount is paid for water mitigation services to companies that provide nothing other than water extraction and equipment rental.

The average cost of a water mitigation claim has risen three-fold since 2000.  Last year, water losses cost $9.6 billion in homeowner property losses.  Most industry observers believe the result is a combination of insurer reticence to hold a hard line on these types of exposures and the contractor’s ability to justify ever-increasing charges previously considered inappropriate.

As a claims professional, how can you control the cost?  Unlike fire-where damage is immediate.  Let’s look at the following scenario as an example.

Mrs. Smith’s water heater collapsed on Friday afternoon.  The water mitigation company begins work Friday evening.  Monday morning arrives, and the bill already includes: emergency service Call (after hours); equipment rental (three days); sheetrock removal CAT3 (after hours); water extraction CAT3 (after hours); and apply anti-microbial (after hours).  Come Tuesday morning, the claim hits your desk with a $7,000 water mitigation bill in which you had no input.

Was the above scenario controllable?  Probably not.  Was the mitigation necessary?  Probably so.  How can you control it?  Mitigate the invoice by educating yourself about water mitigation, the tools of the trade, and the difference between categories of water. In Xactimate the cost of “extract water from carpeted floor” is $.45.  The cost of the same line task for “CAT3 water” is $1.14.  That’s a 61 percent difference, so knowing the difference will save you money.

Today, the guiding standard of care in mitigation comes from the Institute of Inspection Cleaning & Restoration (IICRC).  Here are some helpful definitions from IICRC:

Shall: When the term “shall” is used in this document, it means the practice or procedure is mandatory due to natural law or regulatory requirement, including occupational, public health and other relevant laws, rules or regulations, and is therefore a component of the accepted “standard of care” to be followed.

Should: Refers to the practice or procedure is a component of the accepted “standard of care” to be followed, while not mandatory by regulatory requirements.  When the term recommend (ed) is used in this document, it means that the practice or procedure is advised or suggested, but is not a component of the accepted standard of care to be followed.

May: Signifies an ability or possibility open to a user of the document, and that a referenced practice or procedure is possible or capable of application, but is not a component of the accepted standard of care to be followed.

Category 1: Water originates from a sanitary water source and does not pose a substantial risk from dermal, ingestion, or inhalation exposure.  Examples: Broken water supply lines, tub or sink overflows with no contaminants, appliance malfunctions involving water supply lines, melting ice or snow, falling rainwater, broken toilet tanks and toilet bowls that do not contain contaminants or additives.

Category 2: Water contains significant contamination and has the potential to cause discomfort or sickness if contacted or consumed by humans.  Category 2 water can contain microorganisms or nutrients for microorganisms, as well as organic and inorganic matter (chemical or biological). Examples: discharge lines from dishwashers or washing machines, overflows from washing machines, overflows from toilet bowls on the room side of the trap, and broken aquariums.

Category 3: Water is grossly contaminated and can contain pathogenic, toxigenic, or other harmful agents. Examples: sewage, toilet backflows that originate from beyond the toilet trap, all forms of flooding from seawater, ground surface, and rising water from rivers. Other contaminated water entering or affecting the indoor environment, wind-driven rain from hurricanes or other weather-related events. All can carry silt, organic matter, pesticides, regulated materials, or toxic organic substances.  These are some definitions that will help save money, but knowing the difference in category of water is the beginning. To save substantial money, call a professional who can determine the correct scope of work. How much equipment was really needed? Why did it take more than three days to dry? Why did you need to install a negative air machine (air scrubber)?  Did you use an inject-dry system, or was it really a multiport adapter?  Having a knowledgeable and experienced mitigation auditor with the proper credentials to assist the claims professional in managing the increasing leakage of the mitigation claim can help restore peace of mind that you are not paying too much.

Tom Lackey, IICRC WRT, ASD certified, has 29 years of experience in the restoration industry and serves as Director of Oriel Services, powered by Cunningham Lindsey.  He can be reached at


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