Insurance Claim to Contractor?

Question

I need to know if the 20% for overhead & profit is built into the depreciation amount or the Actual Cash Value.
I do not have replacement cost value.

Answer 1

Overhead and Profit are added to the cost to repair on larger home repair claims. 10 and 10 are standard amounts added to the estimated cost to repair your home when the repairs will involve a general contractor who will subcontract work to various trades. The rule of thumb would be that there will be 3-4 trades involved in the repair (such as drywall, painting and cabinetry). Sometimes contractors try to add O & P to smaller jobs but this is not really justified. Larger jobs in which the general will sub out work get O & P in order that everyone makes a fair amount for their work. Without profit, there's no reason to do the work, after all. But, without subs, there isn't the overhead you get with subcontracting and profit is built into the labor and materials already figured into the cost of repairs.

Depreciation calculations are based upon the age of your home and its condition. You apparently have a depreciable policy; therefore the cost of repairs upon which O & P will be added will be based upon the cost of repairs calculated for you - the depreciated amount.

Actual Cash Value and Replacement Cost are terms that come into play when something is being replaced.

Answer 2

"depreciation" and "actual cash value" are property terms. "overhead & profit" are gross sales terms. You're mixing apples & oranges, and i have NO idea what you're asking.

Insurance does NOT cover profits, or pay the labor to the contractor twice, if they messed it up the first time.

Answer 3

Are you asking about Business Income coverage? If so, it is at a stated amount like 1/3 monthly up to a certain amount with. If you're not talking BI, please clarify.