[quote=“CatContractor”]RP - After 1998 Insurers in Texas continued to charge consumers for General Contractor Replacement Cost Value premiums - and then skim off, in Actual Cash Value payments, General Contractor Overhead and Profit values.
They still try to financially cheat the general public and have been partially successful only by inventing false and misleading construction market misinformation like the “three trade” hoax, damage “complexity” hoax, and “one to two trades does not require General Contractor involvement” hoax.
The Texas Department of Insurance even appeared to turn its head regarding these intrinsic financial indemnification issues during the relatively short period where Eleanor Kitzman, a seemingly pro-insurer commissioner, was in office.
Proactive contractors and consumers have helped to reverse that trend.
The most recent TDI bulletin B-0068-08 mandates that the TDI position has not changed since 1998. **General and Specialty Contractor overhead and profit is to still be objectively assumed in initial base RCV/ACV payment dollars owed claimants. Whether a contractor is hired, or not.
GC O&P values openly included in ACV payments does not unjustly enrichen a loss claimant who does not have a contractor, it simply pays them equitably for actual base GC RCV value naturally woven into the structural loss value.
Despite that mathematical fact, insurers/adjusters continue to try to financially defraud consumers, and also contractors, that provide fair and fully formed construction estimates and supplements that account for GC RCV overhead and profit calculations.
Deja Vu. CatContractor, you were wrong before and you are still wrong on this issue. My policy pays what is reasonably incurred. If a GC is not involved in a project, GC O&P is not owed on the claim. **These Bulletins say nothing to the contrary. **
Actually IP - The opposite is true. “The insurers’ argument that the cost of contractor´s overhead and profit and sales tax on building materials should be excluded from an actual cash value loss settlement because the insured has not incurred these expenses is not persuasive.
Using this logic,** an insured who opts not to repair or replace damaged property would not incur any of the expenses necessary to repair or replace the damaged property, including the costs of building materials, and would collect nothing under an actual cash value loss settlement.
This result would be contrary to the purposes of the subject insurance policy.”**
They only state that when a GC is involved and O&P is part of the claim, it cannot be excluded when calculating ACV and the RC holdback. That’s it. Nowhere does it state it is owed on every claim.
"The value of contractor´s overhead and profit, as well as sales tax on building materials, has been included in the limit of liability for which the insured has paid premium. If the insurer in determining actual cash value excludes costs that are included in the determination of liability limits, on which the insured´s premium is based, the insurer reaps an illegal windfall because the insurer receives premium on insurable values for which loss may never be paid.
To continue to wrongly spew that it is owed “[w]hether a contractor is hired, or not” is wrong and irresponsible. It also demonstrates the problem with your approach – your focus is not the reasonable incurred cost to put the insured back in the same position he was before the loss, but to maximize the claim amount and put as much money as possible in your pocket.
“The value of contractor´s overhead and profitt, as well as sales tax on building materials, has been included in the limit of liability for which the insured has paid premium. If the insurer [OR ADJUSTER]* in determining actual cash value** excludes costs** that are included in the determination of liability limits, on which the insured´s premium is based, the insurer reaps an illegal windfall because the insurer receives premium on insurable values for which loss may never be paid.”
No IP - Overhead, Labor, Materials, Sales Tax, and Profit components have to be honestly calculated in RCV-depreciated-to-ACV calculations presented to consumers by “Indemnification Adjusters”.
Premium dollars accounting for a potential General Contractor to replace the structure naturally means General Contractor profit and overhead costs are part of the insurable values/contingent replacement costs Insurance Companies bill consumers for, and equally owe back every time.
*Added for emphasis.