The Software Behind Every Insurance Estimate
If you have ever filed a property insurance claim, the estimate you received from the insurance company was almost certainly created using a software program called Xactimate, produced by a company called Verisk. Xactimate is the undisputed industry standard for property damage estimating, used by approximately 90 percent of insurance carriers and the vast majority of public adjusters and restoration contractors in the United States.
Understanding what Xactimate is and how it works is important because the estimate produced by this software is the primary document that determines how much money you receive for your claim. The same property damage, estimated by two different people using Xactimate, can produce dramatically different totals depending on the skill, thoroughness, and intent of the person creating the estimate.
How Xactimate Works
Xactimate contains a database of unit prices for virtually every material, labor task, and equipment item involved in construction and restoration. These prices are updated monthly and are localized to specific geographic areas, meaning the prices for Houston are different from the prices for Dallas or Miami. When an adjuster creates an estimate, they build it line by line, selecting specific items from the database and inputting quantities based on their measurements.
For example, a roof repair estimate might include line items for removing the existing shingles (by the square, which is 100 square feet), installing new underlayment, installing new shingles, replacing damaged decking, removing and replacing drip edge, and disposing of debris. Each line item has a unit price that includes labor, material, and equipment costs. The total estimate is the sum of all line items, plus applicable overhead and profit.
Why Two Xactimate Estimates Can Differ Dramatically
The most important thing to understand about Xactimate is that it is a tool, not an oracle. It does not automatically determine the value of your claim. The output is only as good as the input, and two adjusters can look at the same damage and produce wildly different estimates for several reasons.
First, scope of damage: the insurance company adjuster may only include damage they personally observed, while a more thorough inspection might reveal additional damage behind walls, under flooring, or in areas that were not accessible during the initial inspection. Second, line item selection: Xactimate contains thousands of line items, and an experienced estimator knows which items to include. An insurer's adjuster might omit legitimate items such as content manipulation, which is the cost of moving furniture and personal property to facilitate repairs, or they might skip code upgrades required by current building codes.
Third, overhead and profit: when a general contractor is needed to coordinate multiple trades, the estimate should include a line for general contractor overhead and profit, typically 10 percent overhead and 10 percent profit. Insurance companies frequently omit this charge, arguing it is not needed, even when the scope of repairs clearly requires coordination of multiple subcontractors.
**Pro Tip for Industry Professionals:** Avoid using generic categories like "Remove & Replace Drywall" without accounting for ancillary line items required to actually perform it safely (e.g. masking, dust control, final cleaning). An experienced estimator builds a macro that matches real-world construction sequences, drastically closing the delta between Xactimate estimates and real contractor bids.
Common Line Items Insurance Companies Omit
Based on our experience reviewing hundreds of insurance estimates, the following are the most commonly omitted or undervalued line items: general contractor overhead and profit, permit fees, code upgrades to meet current building codes, content manipulation and protection of undamaged property, temporary housing or additional living expenses, soft metals such as window screens, gutters, and downspouts damaged by hail, and interior damage resulting from roof or window failures.
Each of these omissions individually may seem small, but cumulatively they can reduce your estimate by 30 to 50 percent or more. This is one of the primary ways insurance companies underpay claims while still appearing to use the same "objective" estimating software.
Why Your Public Adjuster's Xactimate Estimate Matters
When a public adjuster prepares an Xactimate estimate for your claim, we are creating the primary document that will be used to negotiate with the insurance company. Our estimate must be accurate, comprehensive, and defensible. It needs to include every legitimate line item at the correct quantities and prices, formatted in a way that the insurance company cannot easily dismiss.
This is why experience matters. A public adjuster who has prepared thousands of Xactimate estimates knows exactly what to include, how to properly measure and document the scope of work, and how to present the estimate in a format that facilitates productive negotiation. The estimate becomes the roadmap for the entire claim, and its quality directly impacts the settlement you receive.
What to Look for in Your Insurance Estimate
If you have received an Xactimate estimate from your insurance company, there are several things you should review. Check that the scope of work covers all damaged areas you identified. Verify that the pricing reflects current market conditions in your area. Look for the inclusion of general contractor overhead and profit if the repairs require multiple trades. Confirm that code upgrades are included if your home needs to be brought up to current building codes during repairs.
If anything looks incomplete or incorrect, do not simply accept the estimate. You have the right to challenge it, and a licensed public adjuster can review your insurance estimate and prepare a supplemental estimate that captures everything the insurance company missed. At Dependable Claims Specialists (DCS PIA), we provide free claim reviews and can quickly tell you whether your insurance estimate is fair or whether you should be receiving more.
