A powderpost beetle claim made it all the way to the San Francisco Bay-area local TV news this week. After a woman sought the help of ABC affiliate KGO-TV,

an Oakland flooring mill replaced her defective floor four years after it was installed; the floor was found to have been infested with powderpost beetles. Don White Lumber Company made an insurance claim on the floor and handed over a $16,000 check to homeowner Barbara Matteucci, and workers replaced her ash floor with an oak floor. Mill owner Don White said, "It's the only time in 138 years in business that this has happened. It's a rare kind of occurrence, but you plan for it and you take care of your customers." After discovering powderpost beetles burrowing throughout her dining room floor, an exterminator told Matteucci the floor had most likely been infested with beetles before it was installed. The complete story from KGO-TV can be found here.

I have faced with a same problem now. I purchased the Armstrong Bruce flloors in May 2010 from the Home Depot. After a month, I found multiple holes on my new floors same as Matteucci's picture above. Home Depot said they would stand behind what the Armstrong made a decision and didn't do anything. Armstrong hadn't contacted me until Oct. When I called them, they said the claim was denied in July. I finally had to bring the case to tha Small Claim Court and they called me and asked me to make a settlement at $4,500 even though my damage was over $8,000. I still don't have floors since I un-installed all my new floors. Should I accept their offer? I am so upset how they treated me and fool me around for 4 months.
We also had this problem about 18 months ago with one of our customers and ended up tenting and fumigating the whole house. Cost about the same as replacing the floor but kills the critters all over the house.
These guys have an almost 1 year incubation period.
My insurance Company stood behind us on this claim.
Jim Ferris
Edensaw Woods
Go to floormasters.com and post your question. Flooring contractors from all over the USA will help you with this. The problem is rampant in Hickory to the point that some distributors of wood floors won't sell it.
This is scary to think that the powder post beetles were in the wood for 4 years before coming out!

Are they sure the powder post beetles were in the flooring before installation? Or was the flooring infested from another source after installation?

I think the entire house should have been fumigated, because even though they took out the flooring, who's to say the powder post beetles aren't setting up shop somewhere else in the house?
Fumigation is extreme and not usually worth while. Powder post beetles are actually several different specie. Those that consume hardwood are different from those who consume softwood. They prefer moisture about 20% in wood. Ideal is a dead standing oak. The kiln drying process that flooring goes through kills all the bugs. It is always possible for reinfestation to occur.
The bug lives most of its life as a larvae in the wood, feeding on the sap wood. depending on conditions, they emerge from 9 months to 20 years later. The emergent adult is airborne and will breed and lay eggs in its' very short adult life. The female actually lays its eggs by inserting her 'tube' into the open grain of UNFINISHED wood. Thus the bugs do not eat their way into the wood, but are hatched within it. You could have an infested board with no holes in it (until the adults emerge). If you have possessed the wood longer than the minimum hatching time, it would be impossible to prove when the infestation occurred. Oterwise you are due a full refund. Get positive identification for free from your local agriculture department officials. Remove flooring and burn. It is unlikely the will be in your subfloor or elsewhere unless there is unfinished hardwood around. If there is, burn it as well (or fumigate if really valuable). Party who sold wood (if infested when you received it) should give full refund at the minimum. If they do not, take them to small claims and ask for the maximun...trying to recover labor and other expenses.
My education comes from the school of hard knocks. We had an incident about 16 years ago where we had infested white oak in stock. Bugs hatched and spread around to other flooring materials. By the time we had bugs emerging from floors and discovered the source, we had over a dozen jobs that were affected. One house was fumigated. They ended up coming back and spot treating some spots 2-3 times. A few jobs were salvaged by removing the infested boards and refinishing. A few jobs with widespread problems were torn out and replaced...no fumigation and no more trouble. Most of the problems (emergences) occured from 12 to 18 months after the floor was installed. Believe it or not, we got one call on the ten year anniversary of it all. A home had about a dozen boards that had bugs come out. We replaced those, spot finished and waited. The following summer, we replaced several more boards, and the following summer, after no new emergences, refinished the floor...OK so far...several years.
Glenn Engelbrecht Monday, 08 November 2010
Urban Floor, is also known for importing an Asian version of powderpost beetles. They claim their flooring and containers are fumigated before shipping from China, but I was personally told by an officer of the company, they really don`t fumigate, as it is to expensive for them, They ship into Los Angeles,/Long Beach, unfumigagted containers 100 miles from the most productive farmland in the world, a crime against customers,, and humanity in general.
powderpost-beetle.com what you need MW treatment
Janet Charlton Monday, February 24, 2015
Brought flooring from Sam's Club. Found about three holes with powder, and treated them,this was about two years ago.I thought it was solved but found out two weeks they are all over the house in my new flooring. Have old wood flooring from 2000 and can not find any in it,