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Dealing with property insurance claims is a stressful process for many homeowners. Things can get even more confusing when it comes to understanding "overhead" charges. If you've recently dealt with property restoration in Orlando, FL, you might have noticed your estimate includes an overhead line item. But what does it mean? Why are you being charged extra?
This guide breaks down the concept of overhead in property insurance claims, explains why it’s added, and how it affects your restoration process. Whether you're facing damage from a recent storm, a burst pipe, or an accidental fire, understanding overhead is key to ensuring a smooth restoration process.
Overhead generally refers to the indirect expenses a contractor or restoration company incurs while performing the work on your damaged property. Overhead can include a range of costs that are not directly tied to labor or materials but are still necessary to complete the project. For example:
When you're reviewing an insurance claim for property restoration, especially in areas like Orlando, FL, you'll often encounter overhead charges as part of the contractor's estimate. But what justifies these charges? The answer lies in the complexity and scope of your project.
Insurance companies understand that large-scale restoration projects come with added complexity. These types of projects often require a general contractor to oversee multiple trades, such as roofing, plumbing, electrical work, and carpentry. The role of the contractor is to manage all moving parts, ensuring the work is completed correctly and on schedule.
The overhead charge helps offset the contractor's unique responsibilities and costs, which may include:
It’s important to note that overhead charges are often paired with a contractor's profit. This is commonly referred to as "O&P" in the insurance world. Typically, this line item adds 10% overhead and 10% profit to cover a contractor's operational needs and income. Together, it accounts for 20% on top of the direct costs of your restoration.
While these charges might seem hefty, they are standard industry practice, particularly for insurance-related restoration work.
Orlando’s unpredictable weather, from severe storms to year-round humidity, means property restoration claims are a common occurrence. For claims involving extensive damage or unique restoration needs, the inclusion of overhead can directly impact your project timeline and costs.
After a major hurricane or storm, homes often require multi-layered repairs, from roofing fixes to interior restoration. Overhead allows contractors to handle these complex, multi-faceted projects efficiently.
Water damage restoration often involves using specialized equipment, like dehumidifiers and water extractors, combined with expertise in mold prevention. Overhead charges help cover the logistical costs of this intricate process.
Fire damage not only affects structural integrity but also leaves behind hazardous smoke and soot. Overhead ensures that contractors can handle every part of the project, including air quality assessments and safety compliance.
Not necessarily. Some insurance companies will outline specific conditions under which overhead charges are applicable. Be sure to review your policy and speak with your claims adjuster for clarification.
If you believe the overhead charge is unwarranted or excessive, you can discuss it directly with your adjuster. However, it’s important to understand that these charges follow industry standards and are often non-negotiable.
If your restoration project is small enough to handle with just one or two tradespeople, you may not need a general contractor, which could eliminate overhead charges. However, for more complex projects, skipping a general contractor could result in project delays and quality issues.
This depends on your insurance coverage and your deductible. Overhead is included in the total claim amount, but as long as you're working within the policy limits, your out-of-pocket costs should remain tied to your deductible.
Overhead percentages are consistent across the U.S., but Florida’s strict building codes and frequent need for hurricane-related restoration may result in slightly higher costs due to extra compliance requirements.
Navigating insurance claims and restoration projects can feel daunting. Here are a few tips to simplify the process:
Don’t hesitate to ask your contractor or adjuster for clarification on any line items, including overhead. They’re there to ensure you feel confident in the process.
Choose a licensed restoration company with experience handling insurance claims. Working with local experts in Orlando ensures familiarity with Florida-specific building codes and weather-related challenges.
Request updates from your contractor or restoration team to stay informed about project progress. Overhead includes the administrative work needed to manage unforeseen issues, so staying proactive helps you stay in control.
Before starting restoration work, review your insurance policy to understand coverage limitations and ensure you’re not caught off-guard by unexpected costs.
Overhead charges are more than just industry jargon; they’re a critical part of ensuring your restoration project is successfully managed from start to finish. While it may feel frustrating to see an additional percentage tacked onto your claim, keep in mind that these charges ultimately contribute to a more streamlined and stress-free repair process.
If you’re faced with property damage and need restoration services in Orlando, FL, working with experienced professionals who understand the intricacies of insurance claims can make all the difference.
If you're still feeling unsure about the overhead charges in your insurance estimate or need experienced professionals to handle the restoration of your home, contact Ultra Property Damage today. Our team specializes in property restoration and has extensive experience navigating insurance claims in Orlando, FL.
