Mountain West Insurance Withholds Overhead and Profit Montana Class Action

Mountain West Farm Bureau Mutual Insurance Company is an insurance provider in Montana. Plaintiffs Jodie and Andy Drange insured their home with Mountain West. When they suffered a covered loss, the complaint for this class action alleges, Mountain West “withheld overhead and profit on the claim unless and until it was incurred.”

The Profit and Overhead Class for this action is all Mountain West policyholders in Montana who made a claim for damage to their real property between March 26, 2016 and March 26, 2020, where Mountain West provided money to policyholder but did not pay overhead and profit until and/or unless it was incurred.

What does this mean?

“Overhead and profit,” sometimes abbreviated as O&P, can be a component of repair and replacement costs. When general contractors create repair or rebuild estimates, O&P may be a line item, calculated as a percentage of the costs of the job. It is most common on jobs when the contractor must supervise and coordinate workers in several different trades, such as carpenters, electricians, and plumbers.

Overhead includes operating expenses for maintaining necessary equipment and facilities, such as offices, trucks, and advertising; profit is the margin that allows a contractor to make a living.

The complaint does not specify when O&P costs are or are not incurred, but it’s likely that this happens during the actual repair or replacement of the damage to the property. If, for example, a garage burns down, the O&P costs are not incurred until the owner has it replaced. If the owner decides not to replace it, the O&P costs are not incurred because no general contractor assembles the needed workers or performs the job of rebuilding it.

In this case, plaintiffs Jodie and Andy Drange suffered a loss to their Montana property on May 21, 2016. The complaint says the Dranges and Mountain West “eventually agreed on a scope and repair cost of the loss…” However, Mountain West “withheld profit and overhead on the claim unless and until it was incurred.”

The complaint notes that Mountain West “did not cite to any insurance contract provision as the basis for withholding profit and overhead on the claim until it was incurred, nor did they cite any regulation of law for such refusal.” According to the complaint, this refusal to pay until the cost was incurred “violates the Montana Insurance Regulations governing the handling of insurance claims.”

The complaint alleges that Mountain West engaged in deceptive and unfair trade practices and asks for a declaration that the company’s practices violates Montana law.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Mountain West Insurance Withholds Overhead and Profit Montana Complaint

March 26, 2020

Mountain West Farm Bureau Mutual Insurance Company is an insurance provider in Montana. Plaintiffs Jodie and Andy Drange insured their home with Mountain West. When they suffered a covered loss, the complaint for this class action alleges, Mountain West “withheld overhead and profit on the claim unless and until it was incurred.”

Mountain West Insurance Withholds Overhead and Profit Montana Complaint

Case Event History

Mountain West Insurance Withholds Overhead and Profit Montana Complaint

March 26, 2020

Mountain West Farm Bureau Mutual Insurance Company is an insurance provider in Montana. Plaintiffs Jodie and Andy Drange insured their home with Mountain West. When they suffered a covered loss, the complaint for this class action alleges, Mountain West “withheld overhead and profit on the claim unless and until it was incurred.”

Mountain West Insurance Withholds Overhead and Profit Montana Complaint
Tags: Incomplete payment of benefits due, Insurance