Property insurance carriers seem to be in a war with contractors and their customers regarding the amounts to be paid for restoration construction. They use various tactics trying to eliminate overhead and profit margins. Many contractors either go out of business, do shoddy workmanship or fight to be paid what is fair. The contractors that give up and do shoddy workmanship for the lowered payments often do not have such work noticed by usually ignorant policyholders. The policyholder problems often show up years later leaving policyholders holding the bag caused by insurance company claims tactics and new policy language designed to pay as little contractor profit and overhead as possible.
Continue Reading Overhead & Profit—Do Not Miss April Hall’s Storm Consultants Seminar

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

Steve Patrick is a guru for those estimating property insurance losses. He made a suggestion on Level The Playing Field, for a construction book, Markup & Profit: A Contractor’s Guide, Revisited. His suggestion caught my eye since Merlin Law Group keeps this work in our reference library. This book is an excellent reference which contractors, property loss estimators, and property loss adjusters can use to help when considering reasonable construction pricing.
Continue Reading Restoration Contractor Revenue and Profit Is Important If Policyholders Are Going To Get Quality Work

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

The Colorado Department of Insurance will not be repealing its longstanding bulletin requiring that contractor overhead and profit be a part of a calculation to determine actual cash value at tomorrow’s stakeholder meeting in Denver. This is fantastic news for all Policyholders and the correct decision by those dealing with this issue in the Colorado Department of Insurance. We discussed the issue in, Colorado Overhead and Profit Issues—Merlin Law Group Files a Response for Colorado Policyholders, and noted this meeting in, How To Adjust Actual Cash Value and Overhead and Profit in Colorado—Colorado To Hold Public Forum For Comments.
Continue Reading Colorado Not Replacing Contractor Overhead and Profit Bulletin

The Colorado Division of Insurance will hold a public stakeholder meeting at the Colorado Division of Insurance in Denver on May 21, 2019, regarding its proposal to eliminate one of its long-standing bulletins requiring insurance companies to pay contractor overhead and profit rather than deduct the amount until incurred.1 We discussed this in Colorado Overhead and Profit Issues—Merlin Law Group Files a Response for Colorado Policyholders.
Continue Reading How To Adjust Actual Cash Value and Overhead and Profit in Colorado—Colorado To Hold Public Forum For Comments

The Colorado Department of Insurance has proposed eliminating one of its long-standing bulletins requiring insurance companies to pay contractor overhead and profit rather than deduct the amount until incurred. Such an elimination is obviously against policyholder interests and is the result of insurance industry lobbyists making inroads with Colorado insurance regulators who are supposed to be guardians of the public interest.
Continue Reading Colorado Overhead and Profit Issues—Merlin Law Group Files a Response for Colorado Policyholders

Overhead and Profit can generate a lot of debate when insurance company adjusters are looking to meet their adjustment severity goals and lower claims payments. But have you ever wondered how those same insurers instruct their sales people to calculate overhead and profit when they are calculating the premiums that they charge their customers for the same coverage?
Continue Reading Farmers Insurance Recognizes 25% Contractor Overhead and Profit!