As originally published in C&R Magazine
This 3,900 square-foot, single-family beachfront home in Southern California — with a glass railing and an observation/party deck — suffered extensive fire damage when a homeless person set fire to the adjacent residence under construction. Intense heat, soot and ash-related damage necessitated a complete interior gut down to the studs.
When it comes to estimating damages incurred in a fire loss, multiple complexities and nuances must be considered. From structural mitigation and materials to costs of systems and a timeline for the renovation. Estimating a high net worth fire loss reconstruction takes experience, skill, and resources. Tools like estimating software can be key in accurately conveying scope and cost.
While a fire can be devastating, the materials involved and location of the damaged structure can lead to further complications. Here are several considerations involved in this project.
RMC Group uses the latest technologies to assist with the inspection process. These technologies help identify material and labor cost but cannot be used as a replacement for researching local and regional pricing for any given structure, especially today with material pricing fluctuating dramatically, and a shortage of qualified contractors who can complete a complex project like the one in our case study. High net worth projects compound the research requirements.
To calculate the surface areas and to accurately quantify the building materials of the beach house, we used Xactimate sketch modeling within the software platform to lay out and estimate specific areas and quantities. Along with critical field quantity surveys, these quantities are later compared to the contractor and sub-contractor quantities proposed. Discrepancies are addressed and adjusted to narrow the scope as much as possible.
Close calculation of existing materials and equipment played a key role in estimating the smart home entertainment system in the beach house, where the owner received a replacement bid for the damaged componentry. Were there upgrades in this figure? To find out, we compared the original invoice obtained from the original vendor to the current bid for the theatre. This process identified a cost differential of approximately $155,000 within two short years since installation. Concessions were made on both sides to recommend a fair and reasonable amount. See the example below.
Home Theatre 9/12/2018
|Description||Original Invoice 9/2017||Bid||Difference|
|Crestron Lighting System||$13,230.00||$42,365.00||($29,135.00)|
|Speakers & Install||$10,056.00||$18,930.00||(8,874.00)|
|Video Distr & Control||$10,680.00||$38,366.00||($27,686.00)|
|Networking & Wifi||$4,156.00||$12,566.00||($8,410.00)|
|Cameras & NVR||$2,130.00||$6,852.00||($4,722.00)|
|Crestron Automated Shades||$24,913.00||$65,932.00||($41,019.00)|
|Additional Manual Shade at Entry||$725.00||$0.00||$725.00|
Determining if it’s economically feasible to restore an item rather than replace it is a major aspect of assessing fire-related damage.
Using this custom bathroom sink as an example, the adjuster or expert must determine if this item can be cleaned and restored economically (cleaning, storage, install, possible breakage or theft). All of these items must be considered in order to make the best decision.
In the sink example, it was determined that replacement was the best option. Because the soot was so heavy and produced a very acrid odor and greasy residue, the naturally porous sink material held a high likelihood of retaining the smoke odors. This process continues throughout the scoping of damage with high value materials and components. Some components and assemblies definitely ARE worth saving, restoring, and reinstalling.
A ROM in restoration or reconstruction is used to identify the categories and the corresponding dollar values for a certain phase or an entire project. ROMs are normally calculated within the first few days of going onsite and serve as an initial budgeting tool for damages until more accurate estimates can be produced.
With a ROM, the entire building team knows what to expect. The goal is to get this ROM number within 10% to 15% of the actual cost through extensive experience and cost verifications. This project’s final cost landed within that range.
ROM is calculated by determining and evaluating the following:
Another consideration in creating an estimate is calculating the costs of any custom architecture or artisan work used throughout the home or building.
When identifying custom materials, including wood versus plaster molding, imported versus domestic flooring, custom patterns or fixtures, it’s best to interview the property owner first. Generally, they have the most knowledge of the source and age, especially if they were involved in prior renovations.
Restoring and/or replacing these can significantly add to the costs and timeline of a project. In this case, there were unique features: a set of 90-degree, mitered corner windows without structural column visual impairment, which allowed for an unobstructed view of the Pacific Ocean; glass handrails and a full outdoor kitchen and fireplace at the observation/party deck; items like light fixtures made from a surfboard, two high-end interior kitchens, a steam/sauna shower, and a very high-tech smart home and entertainment package. Research of custom materials needs to be done quickly, due to possible long lead times along with the availability of qualified vendors, and their payment schedules.
Developing a POR that takes into account the unique elements of a project is just as critical as calculating the correct ROM or repair estimate. A critical path schedule can help keep a project on track and alleviate significant costs to the insurer and insured, especially if the owners are forced to live or work elsewhere.
Producing a schedule and bringing everyone to the same table allows necessary adjustments to be made during reconstruction. For example, the contractor can inform the team that the floor heating system is backordered. This becomes part of the critical path, allowing the rest of the team to do everything up to and around that piece to maximize the building schedule.
In addition to establishing a critical path schedule, the following issues factor into estimating a POR:
Repair Cost Estimate - All the elements mentioned above lead to an accurate repair cost estimate. Mutually interested parties attempt to reach an agreement on as many or all factors possible. A record of said agreements or concurrences are made and recommendations offered.
Need expert insight on a fire loss? Contact RMC Group today.
This information is intended for informational purposes only. Each restoration project has unique properties and must be evaluated individually by knowledgeable consultants. Additionally, cutting samples of roof assemblies should be performed by qualified professionals and in some instances approved by the roofing manufacturer. RMC Group is not liable for any loss or damage arising out of or in connection with the use of this information.
1EPA “EPA Actions to Protect the Public from Exposure to Asbestos,” April 2022.