| If you do not know how to handle overhead and | | | | building permits, pay their labor, materials and the |
| profit (OHP) issues in your insurance claim settlement, | | | | rent, and get the work done while earning a profit. |
| you could lose tens of thousands of dollars that you | | | | Traditionally, in a homeowners, renters or business |
| are entitled to collect. Yet, many policyholders find | | | | policy, insurance companies will consider OHP when |
| themselves forced to use savings or borrowed | | | | there are three or more building trades involved in |
| money to complete repairs. It should almost never be | | | | the repairs. For example, when there are carpenters, |
| so. | | | | electricians and plumbers doing repairs, OHP is paid. |
| In any property or insurance claim, if you have to | | | | However, if you only had a painter and a wallpaper |
| come out of pocket more than your deductible for | | | | hanger, most insurers would not pay OHP costs. |
| repairs or replacement, your claim has not been | | | | But consider how much this could affect your claim. |
| handled correctly. | | | | If you had a fire claim with a $50,000 repair estimate |
| There have been disagreements over how to handle | | | | with a general contractor handling the loss, 10% |
| overhead and profit between insurance companies | | | | overhead is $5,000 and 10% profit is another $5,000. |
| for years. I have handled claims for insurers who | | | | Together, that's $10,000 more money owed to you. |
| mandated that OHP must be removed on all repair | | | | So, if you submit your repair estimate and it has OHP |
| estimates. Some insurers will pay OHP, but limit it to | | | | built into it, make sure that the insurance company |
| 10% overhead and 10% profit. Some pay OHP, but | | | | pays the OHP. It could be the difference between |
| will only pay it when the policyholder provides a | | | | getting all your repairs paid for, and you having to |
| signed contractor repair contract. | | | | pay some repairs yourself. |
| But you should know that OHP is a legitimate | | | | If you have experienced a property loss, whether |
| expense of repair in a property loss, and your | | | | fire, wind, flood or other, you need to know winning |
| insurance company should not dispute OHP. | | | | insurance claim strategies. |
| Contractors have to manage sub-contractors, get | | | | |