Below is testimony I elicited from a Nationwide Insurance representative during a recent deposition:

Q. Are you familiar with Overhead and Profit?

A. Yes.

Q. Okay. And when does Nationwide include overhead and profit in its estimates?

A. When it is reasonably necessary to assume that a general contractor is needed to facilitate the repairs.

Q. Okay. Now, going to the back of this estimate, it appears that Nationwide did not apply overhead and profit in terms of the estimate that It produced. Can you explain why Nationwide decided not to include overhead and profit on this estimate?
A. Can we – can I talk to counsel a second?

(A discussion between the attorneys was had wherein the witness was instructed to answer the question)

A. Okay. All right. It appears that we missed it.

Q. Okay.

A. Yeah There’s – there’s no reason why profit and overhead would not have been included on this estimate.

Continue Reading A Refresher on Overhead and Profit in Pennsylvania: Mee v. Safeco

Overhead and Profit cases and discussions are one of the hottest topics in property insurance law. The insurance companies are in a race with each other to push to the limit policy language which reduces traditionally paid benefits and delays payments to their customers. A case last week by the Pennsylvania Supreme Court allows “open season” on Pennsylvania policyholders.1 Continue Reading Overhead and Profit Does Not Have To Be Paid Until The Policyholder Pays It First—-Join Me For A Discussion Today At 2

Belfor Property Restoration did not grow into the world’s largest insurance restoration company charging only 10% and 10% for overhead and profit.1 I have discussed this Xactimate myth of 10% Overhead and 10% Profit with Belfor executives and in their depositions. It astounds me that property insurance estimating is based on a myth of 10 and 10, when most restoration contractors are not taking a job without a margin of at least 40%. Continue Reading Restoration Contractors Need to Charge a Lot More Than 10 & 10 For Overhead and Profit If They Want to Stay in Business

Merlin Law Group previously blogged about Konrad Kurach v. Truck Insurance Exchange,1 where an appeal was recently filed at the Pennsylvania Supreme Court on this question:

Did the Superior Court err as a matter of law in finding that the limitation of payment of General Contractors Overhead and Profit from actual cash value in a replacement cost policy, although violative of binding precedent, was nonetheless valid and enforceable? Continue Reading United Policyholders Files Amicus Brief on Overhead and Profit in Pennsylvania

The Pennsylvania Supreme Court recently agreed to hear argument on the matter of Kurach v. Truck Insurance Exchange.1 Merlin Law Group blogged about this class action lawsuit back in May of 2017 and the link can be found here. Continue Reading Dispute Whether Contractor Overhead & Profit Should Be Included in Actual Cash Value Payment Will Be Decided by State Supreme Court

A recent class action lawsuit filed in Pennsylvania1 raised an issue that policyholder advocates and public adjusters see all over the country – insurers that try to exclude overhead and profit from property damage claim payments made on an actual cash value basis. Continue Reading Are Insurers Required to Pay Overhead and Profit for Payments Made on Actual Cash Value Basis?