Replacing a roof is a major construction project. In almost every municipality in the country, a building permit is legally required before work can commence.
Pulling a permit costs money. Sometimes it's a flat fee of $150; in other jurisdictions, it's calculated as a percentage of the total job cost and can run into the thousands.
Despite this being a mandatory, hard cost incurred solely to comply with local laws, insurance carriers frequently omit the permit fee (PRMT) from their initial estimates. If you don't supplement for it, that cost comes directly out of your profit margin.
The Legal Requirement
Insurance policies are designed to restore the homeowner's property to its pre-loss condition, subject to the terms of the policy. Almost all policies contain an "Ordinance or Law" provision.
This provision explicitly states that the carrier will cover the increased costs necessary to comply with the enforcement of any ordinance or law regulating the construction, repair, or demolition of the property.
A building permit is the literal enforcement of a local ordinance. You cannot legally repair the property without it. Therefore, the carrier is legally obligated to reimburse the cost.
Why Carriers "Miss" It
Adjusters often omit permit fees simply because they don't know the specific requirements of the local municipality where the loss occurred. They write the estimate based on general pricing databases and leave the "local details" to be sorted out later.
This puts the burden of proof squarely on the contractor.
How to Supplement for Permits (PRMT)
Getting paid for a permit is usually straightforward, provided you have the right documentation.
1. Pull the Permit: You must actually pull the permit and pay the fee. Carriers will rarely approve a permit fee based on an estimate; they require proof of incurred cost.
2. Save the Receipt: Keep the official receipt or invoice provided by the municipality showing the exact amount paid.
3. Add the PRMT Code: Add the Xactimate code PRMT (Permits and Fees) to your supplement. The quantity should be 1, and the unit price should be the exact amount you paid.
4. The Supplement Letter: Your supplement letter should be brief and factual: "A building permit is required by the City of [City Name] to perform the approved roof replacement. This is a mandatory cost incurred to comply with local ordinances. Please see the attached receipt for $X.XX and reimburse this incurred cost under the Ordinance or Law provision of the policy."
Automating the Administrative Burden
While getting a permit approved is usually easy, remembering to add it, finding the receipt, and writing the justification for every single claim is an administrative headache.
EstimateDelta streamlines this process. When you upload an estimate, our system checks for the PRMT line item. If it's missing, it flags it for your review.
More importantly, the generated Supplement Letter includes a dedicated section for the permit, citing the Ordinance or Law provision. All you have to do is attach your receipt and send it off.
Stop paying for the homeowner's legal compliance out of your own pocket. [Use EstimateDelta to ensure every hard cost is covered](/pricing).