This is a great question. It is also very good that the flooring installer made this recommendation. Hardwood flooring is very sensitive to moisture and humidity. Controlling the humidity in the crawlspace is very important for the home’s health, indoor air quality (which equals YOUR health) and the stability of the flooring.
Essentially, the treatment of a crawlspace should be about the same as a basement. It should be conditioned with the HVAC system (supply vents only) and the soil should seamlessly covered with a heavy pool liner like material and it should also extend up the walls of the foundation. Before the liner is installed, rigid foam insulation should be placed on the exterior foundation walls. All vents to the outside need to be blocked off and sealed year round. Any insulation that may be present in the floor joist cavities should also be removed.
What you are doing is relocating the building’s thermal envelope from the floor structure to the foundations structure. This better controls the humidity in the whole home and reduces the potential for mold, rot and insects/rodents.
The effect on your heating and cooling bills should not be noticeably changed. In some cases, the relocation of the envelope like I have described has actually helped the efficiency of the home because outside unconditioned air is no longer allowed to be directly under the floor of the living space.
I agree with your flooring contractors recommendations for most applications. Please contact our office if you would like our assistance in correcting your crawlspace issues and any of your flooring or other improvement needs. 314.909.1800.