Xactimate Estimates

An Xactimate estimate is a detailed summary of all the material and labor costs needed for repairs in an homeowners insurance claim. Xactimate is an insurance claims estimating software developed by a company called Xactware. Xactimate is the largest estimating software and is used by both contractors and insurance adjusters. When a homeowners insurance claim is filed, the adjuster will inspect the property and write an Xactimate estimate to determine the total repair costs associated with the claim. Prices in Xactimate are pre-populated based on the particular market or location that the claim is filed. A contractor may need to write an Xactimate estimate in order to write a supplement and dispute the adjuster’s original findings.

Xactimate uses a comprehensive survey process to research and analyze material, equipment, labor prices and install costs from around the country. Xactimate also uses aggregate averages to determine prices, which includes all the highs and all the lows in a given market. This is meant to capture regional differences in material and labor costs caused by market supply and demand. Xactware’s methodology to calculate pricing and costs uses a 5-phase, iterative process that includes data from 35,000 material suppliers and 4 million actual damage estimates each year. They also include 3rd party data sources to incorporate worker’s compensation, federal taxes, state taxes, and local taxes. Additional information on how Xactimate pricing works as well as quarterly pricing trend reports can be found HERE.

While Xactimate pricing is updated and published monthly, sometimes they do not keep pace with rapidly changing market prices. You tend to see this most often immediately following a large storm event where a sudden surge in labor and material demand cause high volatility in pricing. Prices can even change in the time between the adjuster’s inspection and the install date. Sometimes it takes longer for price fluctuations to be reflected in Xactimate estimates for smaller markets or remote localities. You may also see discrepancies in Xactimate pricing when it comes to high-end specialty trade work or other trades where there is a shortage of qualified tradespeople. Now lets say a contractor is installing copper valley liners on a home. The adjuster may enter metal valley liners into the Xactimate estimate but that will likely not reflect the reality that a specialty tradesman will be required to build and possibly install a highly customized product. On top of that there’s only one copper specialist in town that does that particular kind of work. This will certainly result in a huge discrepancy between the adjuster’s suggested cost and the actual cost to do the work correctly. Both of these scenarios should be rectified by submitting a supplement to the insurance company to dispute the adjuster’s findings and provide supporting documentation to make your case. A contractor supplement involves re-writing the Xactimate estimate to reflect actual costs and providing copies of invoices from suppliers, crews and specialty bid items.

The answer is simple: to get paid an accurate price on insurance roofing jobs. Let’s be honest, when it comes to insurance roofing and restoration, the insurance company makes the rules and the insurance company pays the bills. That being said, if they provide a scope of loss written in Xactimate, they will expect and/or require any dispute to also be submitted as an Xactimate estimate. Xactimate is the most common language for insurance adjusters so contractors who are able to speak the adjuster’s language have the best chance at getting what they need approved to install the job correctly. While there are situations where Xactimate pricing may be incorrect in a given market, the more likely reason for supplements is the adjuster entering in the wrong product, miscalculating quantity needed or leaving out components or items required by local building codes.

There are typically 2 main scenarios where a contractor would need to submit an Xactimate estimate to the insurance carrier or adjuster. The first scenario is when submitting a supplement  to dispute and challenge the adjuster’s original findings on the claim’s scope of loss. The second scenario is when an adjuster requests a detailed estimate prior to writing a scope of loss on the claim. There may be a few reasons an adjuster would request an estimate. One is that you might have a well established relationship with a particular adjuster. He/she trusts you and knows that you will provide an honest assessment of the property damage in the claim. Another reason could be that there was a large storm event and, based on the property location, the adjuster assumes that the home is heavily damaged. The third reason is that the adjuster may lack the expertise to estimate a roofing system that is uncommon in their market. In all 3 of these cases, the adjuster is likely deferring to the contractor’s expertise in order to save time.  The adjuster will either submit the contractor’s Xactimate in its entirety or use it as a starting point for their own and make minor edits.

Absolutely! There are many reasons why it makes sense to hire a 3rd party to supplement your roofing jobs. The most obvious is that contractors are too busy to write new Xactimate estimates for all of their jobs. Or they’re simply not that good at writing Xactimate estimates. Since Xactimate charges per user, some contractors have a dedicated person on staff that specializes in Xactimate writing. Even those types of companies may need a hand if a hurricane or 100-year hailstorm hits in their market. In this situation, you don’t have time to hire and train someone new, but a 3rd party roofing supplement specialist can easily step in and handle the overflow of claims.  

Like any industry there are a ton of options that aim to fit the specific needs of various contractors. Some 3rd party companies focus entirely on writing Xactimate estimates while others include these in more comprehensive solutions for writing insurance supplements. Since supplements account for the majority of Xactimate estimates being submitted, it may be worth exploring your business overall supplementing needs.