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Policyholder Question – Was My Overhead & Profit Calculated Properly for My Property Insurance Claim?

Policyholder Question – Was My Overhead & Profit Calculated Properly for My Property Insurance Claim?

Q. In my case, the insurance adjuster added $10,300.00 to my Irma hurricane claim to cover Overhead & Profit. This amount and the ACV were paid to me by Frontline upfront under my Replacement Value hurricane policy. The recoverable depreciation was held back until the work was completed. I required six trades to complete the work...roofer, painter, solar system, plumber, gutters and garage door. I did not hire a general contractor. I dealt with each trade directly. After the roof and painting were completed this past April (2019), I filed my claim for about $1,700.00 additional expenses relating to the roof and painting, plus the recoverable depreciation relating to the roof and painting (approx. $7300.00 RD). There was no dispute with respect to the $1,700.00 add'l expenses. The balance of the work (gutters, garage door, etc.) will be completed this winter/spring. My out of pocket expenses paid to the roofer and painter was only about $400.00 more than the ACV plus recoverable depreciation. Frontline clawed back almost all of my Overhead & Profit recovery relating to the roof and painting and offset it against the Recoverable Depreciation. The result was that I received a check for about $400.00, rather than a check for $9000.00 that I expected ($1,700 add'l expenses plus $7300 recoverable depreciation). Frontline's explanation is that I am only entitled to receive the amount of my out of pocket expenses so, to achieve this result, they can claw back some, or all, of the Overhead & Profit amount previously paid. The effect of this is that older homes with higher depreciation such as our 45 year old bungalow will have almost all, if not all, of the previously paid O & P clawed back, while a newer home with lower depreciation, like my neighbor's 4 year old home, will have very little of the O & P clawed back. In both cases we have acted as our own general contractor. Has my recoverable depreciation claim been properly handled? My home is in Florida. Thank you

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