Ep. 493 The Evolution of EIFS in California
Rancho Mesa's Media Communications & Client Services Manager Alyssa Burley and Account Executive Casey Craig talk about the evolution of Exterior Insulation and Finish Systems (EIFS) in California.
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Director/Host: Alyssa Burley
Guest: Casey Craig
Producer/Editor: Jadyn Brandt
Music: "Home" by JHS Pedals, “Breaking News Intro” by nem0production
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Transcript
Alyssa Burley: You’re listening to Rancho Mesa’s StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive.
I’m your host, Alyssa Burley, and today I’m joined by Casey Craig, Account Executive with Rancho Mesa. And, we’re going to talk about the evolution of EIFS in California.
Casey, welcome to the show, and please excuse the construction noise that might be in the background.
Casey Craig: Thanks for having me.
AB: As someone who specifically works with artisan contractors who specialize in plaster, drywall and painting, will you explain the EIFS acronym and why it’s concerning insurance carriers?
CC: Yeah, of course. EIFS stands for exterior insulation and finish systems. It’s been around since 1969 and has grown in demand for new construction in California with a constant push to get closer to the “net-zero” buildings. With our strong niche in plastering, drywall and painting contractors in California, one of the most frequently asked questions by insurance carrier underwriters pertains to whether a contractor self-performs or subcontracts out EIFS work.
This has become a significant concern for insurers, particularly when it comes to the proper installation of drainage systems over wood-framed buildings and/or the use of inferior materials. So, over the past decade, there have been significant strides to insulate contractors from claims arising from EIFS.
AB: EIFS has been around since the late 60s; so, what was the catalyst for California to address concerns over proper materials and installation?
CC: Yeah, the major turning point for EIFS occurred during the 1995 hurricane season in North Carolina, when an increase in insurance claims highlighted the risks associated with improper drainage systems in EIFS installations. These claims prompted a dramatic shift in the way EIFS systems were installed and regulated moving forward. In response to these challenges, the industry made considerable strides to enhance moisture control, seismic resilience, and the use of materials that are better suited to California’s diverse climates—ranging from dry desert conditions to coastal, humid areas.
AB: How does EIFS affect California’s energy efficiency standards for buildings?
CC: Good question. California’s building energy efficiency standards continue to evolve every year. As these standards become more rigorous, it is expected that EIFS will play an even larger role in meeting the energy demands of new buildings.
The insulation provided by EIFS systems makes them a critical component of energy-efficient design, helping buildings achieve net-zero energy performance while still having curb appeal. It is likely that EIFS will become a requirement for most, if not all, new construction projects in California in the near future.
AB: If EIFS is expected to play a greater role in building energy efficiency in California, what does that mean for insurance carriers and their potential increased exposure?
CC: Even though EIFS is growing in importance, many insurance carriers still view EIFS installations with caution, due to the historical challenges and claims associated with improper installation techniques.
As a result, some insurers continue to treat EIFS as a “high-risk” exposure and require stand-alone policies to cover the potential risks. Currently, there are approximately 7,660 plastering professionals employed in California, that’s according to the most recent data provided by the Bureau of Labor Statistics.
However, only a small fraction of these employees are actively involved with EIFS installations. This limited exposure has contributed to a gap in the insurance market, with many carriers potentially lacking a deep understanding of the evolving EIFS industry and its improvements.
AB: So, it’s important for a contractor to work with a broker and insurance carrier who understands their business, its unique risks, and how their specific industry is improving, right?
CC: Exactly. For plastering contractors in California, working with a knowledgeable broker is crucial to navigating the complexities of insuring EIFS work. Each company’s exposure to EIFS risk is unique, and it is essential to have a broker who understands these nuances. A specialized broker can help secure the most competitive pricing available and ensure that they are paired with insurance carriers that are not only familiar with the latest industry advancements but are also willing to offer comprehensive coverage for EIFS-related risks.
While industry changes can take time, it is vital to have a broker who is actively advocating on your behalf, challenging insurers’ outdated guidelines and promoting an accurate understanding of the current EIFS landscape. By building strong relationships with insurers who understand the evolving nature of EIFS, contractors can improve their risk management profiles and position themselves for long-term success.
AB: Yeah, well said. So Casey, if listeners have questions about EIFS, what’s the best way to get in touch with you?
CC: Yeah you can call me at (619) 438-6900 or you can email me at ccraig@ranchomesa.com
AB: Casey, thanks for joining me in StudioOne™.
CC: Always a blast.
AB: Thanks for tuning in to our latest episode produced by StudioOne™. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.