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You drove the nail straight in Ghost. That's the way it is and should be and has been all the years I have been doing this mess.

I think I disagree with all the post. Unit prices came about in the late 1950's. The first auto estimates I looked at were parts, labor and material. The first property estimates from the pick up truck carpenter who did much of the small repair work in this area was in board feet, # of nails . gallons of paint , rolls of wallpaper and hours of labor, then profit was the last figure.

Contractors began calling themselves "insurance conttractors" and worked on 1/3rd material cost, 1/3 labor and 1/3 profit in an metro area like greator Houston or 1 hours drive. Extra expense was an add on. The price list were published by all the "insurance contractors" and sent to ever property adjusters office and the adjuster used one or more of these published prices to write his scope to see if the contractor was between the ditches. In the event of a large catastrophe about 15 to 20 contractors and asjusters met as soon as the wind stopped and worked up a price list for all the local and all of the out of town adjusters to use as a price guide. 

In the late 80's we began to see a few DOS programs that were only word processors with an adding machine. All were designed to have the unit price changed by the estimator. We were still thinking 1/3, 1/3. 1/3 after doing it this way for over 30 years. Then along comes one program for adjusters that added a feature from the contractor program called O&P of 10+10=21% or 20% take your choice. The vender system recruited from the contractor ranks and this program with a unit price of .45 to clean a small ash tray became very popular for the "complete estimate"

Catastrophe adjusters, were brain washed by the vendors and carriers by rejecting files that was not  the most used  contractors estimate as it was not in the correct data base, therefore it was incorrect. Very qualified adjusters were not permitted to change the data base on a very problomatic loss to get it closed.

This monster was created by the carriers, who hired adjusters to stop the phone's from ringing and leave the hard cases for the clean up team after the worms fell by the wayside. In my opine ever software program has all the cost in the unit price(if the unit price is the market price) and ever estimate should have a gross profit of between 30 to 40% for all general contractors who are begging for this work. This lawsuit should have never been filed as it was not the contractors who would not do the work. It was the greedy insurards who wanted "more" of the dumb insurance carriers money, who allowed this myth to grow into this monster "its owed if you have three trades"

I have the feeling I may see this post on the big screen someday soon.

I first heard of this concept in 1979. Where and when it originated, I don't know. It had probably been around for years even at that time.

I have always been of the impression that the reason for this "rule" was that an insured did not need a general contractor to plan, schedule or run the repairs if only two trades were involved, unless the repairs were very unusual or complicated.

For instance, if the only damage is to a roof, the insured surely doesn't need a general contractor to get the roof replaced. Just call a roofing company.

I, personally, don't have a problem with this procedure.

Jim- my only advice is to use spell check (and sunscreen, but that one came from a Dave Berry commencement address, so I can't take credit for that). To use spell check, you go to edit your post (once posted), and then click on the spell check icon. Good luck with your time in the barrel.

Why should the insurance property re-contruction industry be any differant from most all of the other services offered to the public. Have you ever seen an auto estimate on a collision with O &P added to the bottom line. Have you ever seen a legal fee bill with O & P added. I still contend the price guides, the sodtware estimating programs used in insurance property claims have  a  built in P & O of at least 33.3 for profit & overhead. If they do not ever loss since the first computer generator estimatge is if prima facia evidence of deliberate fraud by the carriers and price fixing which is also deceptive trade practice.