Posted On: May 16, 2006, 6:59 pm CDT

Posted By: Tony

Roger,
We are back to your shell game. I LOVE how you use underwriting and insurance terminology to try to prove you knowledge.

What it breaks down to is you want 10% profit on your overhead. Wouldn't that make your profit in excess of the industry standard 10% of the cost of repairs?

Next, you want RC up front. Bubba, READ the policy. If it says RC up front, then that is what should be paid. Most (I haven't read all of them) state claims will be paid at ACV until repairs have been completed or "the expense has been incurred". If you and I work on a claim and agree on $10K for RC and I pay it as:

$10,000 RC
-$ 1,000 Dep
-$ 1,000 Deductible
$ 8,000 ACV

Now if you and I have done this and agreed on it then it takes you six months to do the work and your costs go up to $11K that is your problem. You have a signed contract to do the work for X dollars. If YOU don't get it done in a reasonable time for the agreed on amount, why should the insurance companies compensate you for you running your company poorly. In short, your problem, not ours.

Having said all this, MOST companies will speak to you to determine why the costs have increased and if reasonable, will reimburse you for these costs.

You also want O&P on limited trades (one or two). O&P is due to licensed GC's when the expense is reasonable and necessary to effect repairs. If you have roofers on staff and you do the roof (and that is all or maybe minor paint etc) you haven't EARNED (difficult concept) the O&P. You KNOW there is built in profit in the base costs of an est. The O&P is for the scheduling issues, inspecting the site to insure work is progressing properly etc.

IF you have the men to do the work, and they do it, you haven't acted as a GC. You acted as a ROOFER! Thus, not entitled to O&P.

Last, let's try your creative math again.

First your example of the way it "should" be done:


$10,103.19 Sub-Total
$ 114.67 Material Tax
_________________________
$10,217.86 Sub-sub total
$ 1,021.79 10% Overhead
_________________________
$11,239.65 Total
$ 1,123.97 10% Profit
_________________________
$12,363.62 Basic Business Math Grand Total


Using the same numbers and depreciation (which isn't owed until the work is done per the policy).

The amount due is:
$10,217.86
+$ 1,021.79 Overhead
+$ 1,021.79 Profit
$12,261.44 Subtotal One
-$ 1,000.00 Depreciation
-$ 100.00 Depreciated Overhead
-$ 100.00 Depreciated Profit
$11,061.44 Subtotal Two
-$ 1,000.00 Deductible
$10,061.44 Total due Insured NOW

$ 1,200.00 Depreciated amount due Insured upon receipt of signed contract (depending on company) or work completion.

Total Insured MAY receive from Ins. Co.
$10,061.44 ACV
$ 1,200.00 RC (or Depreciation) Benefits
$11,261.44 Total due upon completion etc.


The ONLY difference now (without the creative math) is the $1000 deductible you didn't include in your numbers and the $102.18 difference between the OWED profit and the profit on the overhead.

Again, obfuscation is your modus operandi. It's amazing what someone who is used to dealing w/ people like you can find when they clear away your song and dance.

To quote a great, "Go away little boy, you bother me".