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There has been litigation on this subject.  Not all carriers view this the same way. 

Unless a specific carrier is instructing you otherwise, if O&P is allowed on a repair, then 10 & 10 on the ACV should be allowed.  For example that is the default result you would get if you did the estimate in Xactimate.

There has also been litigation on the "3 trades" rule, and I think the one involving State Farm came out with a ruling along the lines of O&P whenever it is reasonably expected that a General Contractor would be needed to do the repair.  So that is not a hard and fast rule that you have to have 3 trades. 

You will find policies and endorsements that comment on ACV, but I'm not aware of any that specifically describe or limit O&P.  I believe that carriers who had a standard practice of refusing O&P prior to completion of repair have gotten their hands slapped.

I worked State Farm claims at Katrina for 5 months and they allowed O&P on the ACV of the claim, if that is your question...

The litigation regarding when to allow O&P was prior to Katrina.

Hi Joseph, gotcha on how it works in Florida.

Over the years I have had many carriers do that same requirement, but more often in California these days the carriers seem to be OK on paying O&P on the adjusted value of ACV claim.

For those who are into boring reading, here is an article that summarizes some of the issues  http://www.adjustersinternational.c....pdf 

as I mentioned earlier on this thread, not all carriers view this the same way. You have to "dance with the one that brought ya".

Here's another one,  http://news.public.findlaw.com/andr...tkins.html
13 Million dollar verdict, and this was a part of the allegations:

As a staff Catastrophe adjuster for one of the large companies I can tell you that we have pretty strict standards when it comes to O&P.  Usually to be considered for O&P a claim has to be over 20 thousand dollars and there must be extensive covered damage to both the inside and outside of the structure.  These claims are usually fire claims and large tornado/hurricane claims.  Usually your standard hail/wind claims do not qualify for O&P under our guidlines.  For example, if an insured has hail damage to roof, gutters, window screens, siding, and paint on the outside of their home we would not allow O&P.  The claim is not complex enough for the insured to require a general contractor.  In most cases the roofing companies will do all of the work as a lot of roofing companies also do siding, gutters, etc.  This especially when you have the storm chasers working the storm and going door to door soliciting claims.  That is why one of the first questions the storm chaser will ask you is if you allow O&P on 3 or more trades.  They will always "find damage" to  include roof, paint, siding, and gutters thus ensuring that more than 3 trades are represented even though their crew will do all the work.  

Something is "odd" about tornado damage not standing out for an experienced adjuster.  A  lot of structural damage would be very apparent.

If it was a liability claim from blasting, I bet the liability adjuster could find find some witness that would tell a story of this "leaning house" was a condition before this storm . The lean/ rack may not be related to weather, or this weather event. I will also guess the Haig report and opine is along this line. Bet this case is reversed on appeal. My 2 cents.

This is kinda off topic.... The adjuster looks at a loss and does an accurate scope and detailed estimate. When he gets his mail he finds an estimate for roof shingles on and off $, gutter repairs$, drywall ceiling repairs $, ceiling paint $ clean up and trash haul $. It is signed by the contactor the insured selected and will use to do the work for a total of $1,000.00 less than the adjusters estimate that is due when the work is complete.

 1.Do you say the estimate is not detailed enough and not acceptable ?

2. Turn in both and recommend the contractor's amount be paid ?

3. Call the insured & contractor and say you can only recommend your estimate amount as its more accurate ?

4. Tell the insured who is an officer of the insurance company that he left some $ on the table.

5. Tell the insured to send $1,000.00 back to the claim department as you get paid by the amount of the loss and it make a differance to YOU.

I understand the issues of complexity of the project requiring a GC, but how do you draw a line at a dollar amount? 

That is not a concept I can apply to the files on my desk.

Sure, there are big claims that come through, but the day to day water pipe leaks that get attended to by the national companies like ServPro, or ServiceMaster will often range $5,000 to $15,000.  I've lived and worked in the same area doing claims for many years, and see these guys subcontracting out the larger drywall repairs, a different vendor for flooring, and of course there are lot's of things they will do with their own laborers.  And they have a GC license.

I say choice #2 if the lower estimate will put the insured back in a pre-loss condition. And yes I would turn in both estimates, using mine as a comparative to show that the contractor's bid is reasonable when compared to unit pricing costs. You see estimates like this a lot with contractors that don't do insurance work. They walk in a room and say "$400 for paint" "$450 for drywall" without calling out the exact SF.

Yep. Per Xactimate, the BSC is their solution to "economy of scale". If it is a big job, lots of Sf, you are supposed to "factor in" the BSC.

If it's a small job, your are supposed to "break out" the BSC, but many carriers don't like to see them, and so they get cut anyway.

BSC's are the couple hours (usually) of trip charges associated with the trade, and have zero materials whatsoever, it is pure labor.  When the BSC is "factored in" those couple hours of labor get sprinkled into the unit cost, so the cost per Sf goes up a little bit.

People refer to Base Service Charges as Min Chg, but a typical Min Chge would allow for 1/2 sheet of drywall or whatever to get a small job done. The BSC's are pure labor, and when you look at the estimate summary window in Xactimate and click on the Base Service Charge icon you can see how many hours they are allowing, and even change the number of hours, turn it off, factor that BSC into the unit costs, etc.

Personally, to avoid grief with claims examiners that don't REALLY understand BSC's and just look at them as fluff (they aren't intended to be), I just always set Xactimate to "factor in" BSC's, and if a trade needs more time due to small area of repair I put it right in the estimate with a note explaining why they need 2 hours or whatever.   Otherwise, the examiner is reading your estimate, OK, this room looks reasonable, OK, we allow that for paint, OK, then they hit the last page with $100's of dollars of Base Service Charges all grouped together, and they tend to protest them.

If someone does a fresh install of Xactimate, and the default BSC settings are not changed, it will often create more Base Service fees than are needed.  If your estimate has the right combination of repairs, Xactimate can spit out a bunch of overlapping BSC's like for the cleaning trade, plus for a general laborer, if not inspected by human eyes.

I get claims from a semi-large carrier in California that has a flat rule: no more than 2 Min Chge per estimate, and they really don't want to see more than 1 - it sets off red flags for the very reason you stated (they figure the same restoration crew will do most of the trades anyway).

If it is a small 5 x 8 bathroom with multiple trades, and you are only paying the SF of paint, flooring, baseboard - nobody gets out of bed for those prices. It can be a challenge, and that is the "nut" that Xactimate was trying to crack when they gave birth to BSC's with the 2002 version.

I think it was a good concept, but they should have applied some lubricant and education for a year before releasing it - as the BSC's have been rejected by most clients I work with.   People that "don't have time to read the manual" do not fully understand BSC's and they got a bad rap.

2.