Why Adjusters Deny Overhead & Profit (And Exactly How to Fight Back)

The Most Profitable Fight in Auto Body

Overhead & Profit (O&P) — typically 10% overhead plus 10% profit — is the single most commonly denied supplement item in auto body claims. On a $15,000 repair, that's $3,000 that adjusters routinely try to exclude. And because most shops don't fight back, insurers have learned that denying O&P is essentially free money.

The good news: O&P is one of the easiest supplement items to win — if you know how to write the letter. This guide covers the exact language, citations, and escalation steps that get O&P approved.

Why Adjusters Deny O&P

Insurers typically deny O&P with one of three arguments:

• "You're not a general contractor." Some adjusters claim O&P only applies to general contractors managing multiple subcontractors. This is incorrect — O&P applies to any repair business coordinating multiple trades, vendors, and operations.
• "It's already included in the labor rate." This is the most common denial and the easiest to rebut. Labor rates cover direct labor costs — not the overhead of running a business (rent, insurance, equipment, management).
• "We don't pay O&P on direct repairs." Some insurers have internal policies against paying O&P. These policies are not binding on you or the vehicle owner, and they frequently violate state insurance regulations requiring insurers to restore vehicles to pre-loss condition.

The Citation That Wins O&P Arguments

The most powerful citation for O&P disputes is the estimating platform's own documentation. CCC ONE, Mitchell WorkCenter, and Audatex all explicitly state in their P-pages that O&P is a legitimate, separately billable item that is NOT included in published labor times. Quoting the platform the adjuster uses to build their estimate — against their own denial — is extremely effective.

Additionally, the Collision Industry Conference (CIC) has published position statements supporting O&P as a standard industry practice. Citing CIC documentation in your supplement letter adds a third-party industry authority to your argument.

The Exact Language That Gets O&P Approved

Here is the language that works:

"We respectfully request approval of Overhead & Profit at the industry-standard rate of 10% overhead and 10% profit on all applicable operations. Per [CCC ONE / Mitchell / Audatex] P-pages, O&P is explicitly listed as a separate, non-included operation and is not embedded in published labor times. Our shop coordinates multiple vendors, sublets, and operations on this repair — all of which generate overhead costs that must be recovered through O&P. Denial of O&P on this claim is inconsistent with [carrier name]'s obligation to restore the vehicle to its pre-loss condition under the policy."

Escalation Path When O&P Is Still Denied

If the adjuster denies O&P after your written request, escalate immediately. Request the denial in writing with the specific reason. Then send a rebuttal letter to the adjuster's supervisor citing the P-page documentation and CIC position statement. If the supervisor maintains the denial, file a complaint with your state's department of insurance — most states have regulations requiring insurers to pay reasonable and customary repair costs, which include O&P.

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