Key Takeaway
Xactimate is property damage estimating software made by Verisk Analytics and is the most widely used estimating tool in U.S. property insurance. It contains localized pricing across hundreds of U.S. geographic zones, but two Xactimate estimates for the same damage can differ materially depending on scope, line-item selection, and whether overhead and profit (commonly cited as 10% and 10%) are included. Insurance company estimates routinely omit legitimate line items, making independent review by a public adjuster essential.
What Is Xactimate and Who Uses It?
Xactimate is the industry-standard software for estimating property damage repair costs, developed and maintained by Verisk Analytics, a leading data analytics provider for the insurance industry. Xactimate is the most widely used estimating tool among U.S. insurance carriers, public adjusters, and restoration contractors, making it the single most important tool in determining how much a policyholder receives for a claim.
Xactimate is used by three groups in the insurance claims process:
- Insurance company adjusters (staff and independent) - create estimates on behalf of the carrier
- Public adjusters - create independent estimates on behalf of the policyholder
- Restoration contractors - create repair-scope estimates and supplement requests
Because all parties use the same software, the quality of the Xactimate estimate - not the software itself - determines the outcome. Xactimate's pricing database is updated regularly and contains localized unit prices for materials, labor, and equipment across a large number of geographic price zones in the United States. This means pricing in Houston differs from pricing in Dallas, Miami, or Phoenix - and using the correct zone is critical to an accurate estimate.
How Does Xactimate Calculate Repair Costs?
Xactimate calculates repair costs by summing individual line items, each representing a specific material, labor task, or equipment charge required to restore damaged property. Every line item has a unit price derived from Verisk's pricing database, which aggregates contractor pricing data, material supplier costs, and labor market surveys for each geographic zone.
A typical Xactimate estimate is built as follows:
- Scope identification - the estimator inspects the property and identifies all damaged components
- Line-item selection - each repair task is matched to a specific Xactimate category code (e.g., "RFG LAMI" for laminated asphalt shingle removal)
- Quantity input - measurements from the field inspection determine quantities (e.g., 25 squares of roofing = 2,500 square feet)
- Price application - Xactimate applies the localized unit price for each line item
- Overhead and Profit (O&P) - when a general contractor is required to coordinate multiple trades, a standard 10% overhead and 10% profit markup is added to the subtotal
- Total - the sum of all line items plus applicable O&P equals the estimated repair cost
The Xactimate database contains line-item pricing covering a wide range of residential and commercial construction tasks. The depth of this database means that an experienced estimator can capture repair costs with high precision - but only if they identify the correct scope and select the appropriate line items.
Why Can Two Xactimate Estimates for the Same Damage Be So Different?
Two Xactimate estimates for identical damage can differ materially because Xactimate is a tool, not an automated valuation system. The output depends entirely on the skill, thoroughness, and intent of the person creating the estimate. Three factors drive the most significant differences between insurance company estimates and public adjuster estimates.
1. Scope of damage. The insurance company adjuster may only include damage observed during a limited inspection. Field inspections by insurance company adjusters are often time-constrained and can miss hidden damage behind walls, under flooring, or in attic spaces. A thorough inspection by a public adjuster typically takes longer and frequently reveals damage the carrier's adjuster missed.
2. Line-item selection. Xactimate contains over 20,000 line items, and the estimator chooses which ones to include. Insurance company adjusters frequently omit legitimate items such as content manipulation (moving furniture to facilitate repairs), general contractor overhead and profit, building code upgrades, and temporary protection of unaffected areas during construction.
3. Overhead and Profit (O&P). The commonly cited 10% overhead and 10% profit markup compensates a general contractor who coordinates multiple subcontractors. Insurance companies routinely omit O&P from estimates, even when the repair scope involves three or more trades (roofing, drywall, painting, flooring). O&P is generally recognized as standard when a general contractor is required on a multi-trade repair, yet it remains one of the most frequently disputed line items in property claims.
Pro Tip
When reviewing two competing Xactimate estimates, sort both by category code and compare line by line. The gap is almost never about unit pricing - it is about missing line items and excluded scope. Build a "delta sheet" showing every line item present in the public adjuster's estimate but absent from the carrier's estimate. This forces the insurance adjuster to address each omission individually rather than dismissing the estimate as "inflated."
What Are the Most Common Line Items Insurance Companies Omit from Xactimate Estimates?
Insurance company Xactimate estimates routinely omit legitimate line items, and the cumulative effect can be material. These omissions are systematic - they follow patterns that experienced public adjusters recognize across many claims. The following table lists the most commonly omitted items, their typical value, and why insurance adjusters leave them out.
| Omitted Line Item | Typical Value | Why Insurers Omit It |
|---|---|---|
| General Contractor Overhead & Profit (O&P) | 20% of repair subtotal (10% + 10%) | Carrier argues homeowner can self-manage or use a single-trade contractor |
| Building Code Upgrades | $2,000–$15,000+ depending on scope | Requires code research; carrier claims pre-loss condition applies |
| Content Manipulation (furniture moving) | $500–$3,000 per affected area | Carrier assumes homeowner will move items themselves |
| Permit Fees | $500–$2,500 | Carrier defers until contractor pulls permits (often never reimbursed) |
| Temporary Protection / Masking | $300–$1,500 | Classified as "included" in labor - but it is a separate task |
| Haul-off / Debris Disposal | $500–$2,000 | Carrier underestimates volume or uses dump-fee-only pricing |
| Soft Metal Replacement (screens, gutters, downspouts) | $1,000–$5,000 | Carrier inspects roof only; does not examine all soft metals |
| Interior Damage from Roof/Window Breach | $2,000–$20,000+ | Carrier scopes exterior only and defers interior until later supplement |
| HVAC Damage (condenser fins, coils) | $1,500–$8,000 | Requires HVAC specialist inspection; carrier skips unless obvious |
| Final Cleaning After Construction | $200–$800 | Carrier claims it is "included" in other line items |
The cumulative effect of these omissions is a primary reason insurance company estimates fall below actual repair costs. Public adjusters at Dependable Claims Specialists (DCS) use Xactimate to build comprehensive estimates that include every applicable line item, ensuring the carrier must address each one during negotiation.
Why Does the Quality of Your Public Adjuster's Xactimate Estimate Matter?
The Xactimate estimate prepared by a public adjuster is the single most important document in the negotiation process. It serves as the policyholder's formal demand - the itemized, defensible basis for the settlement amount. A well-prepared estimate forces the insurance company to respond to specific line items rather than offering a lump-sum payment with no supporting detail.
A high-quality public adjuster Xactimate estimate must meet four criteria:
- Accurate measurements - field-verified dimensions using laser measurement tools, drone imagery, and physical inspection
- Complete scope - every damaged component identified, including hidden damage documented through moisture mapping, thermal imaging, or destructive testing
- Correct line-item selection - matching each repair task to the appropriate Xactimate category code, including ancillary items (masking, dust barriers, final cleaning) that reflect actual construction sequences
- Proper overhead and profit - included whenever the scope requires a general contractor to coordinate multiple trades
Xactimate estimates prepared by experienced professionals using current pricing databases and thorough field documentation are the industry standard for claim negotiation. At DCS, every estimate is prepared by a licensed public adjuster with extensive Xactimate experience, ensuring it is accurate, comprehensive, and defensible against carrier pushback.
Pro Tip
Avoid using generic Xactimate categories like "Remove & Replace Drywall" without including the ancillary line items required to actually perform the work safely - masking, dust control, content manipulation, and final cleaning. An experienced estimator builds macros that match real-world construction sequences, closing the gap between Xactimate estimates and actual contractor bids.
What Should You Look for When Reviewing Your Insurance Estimate?
Every policyholder should review their insurance company's Xactimate estimate for completeness, accuracy, and proper pricing before accepting any settlement offer. The following checklist identifies the most critical items to verify.
Key items to verify in an insurance Xactimate estimate:
- Scope of work - does the estimate cover every damaged area identified during inspection, including interior damage from exterior breaches?
- Overhead and Profit - is O&P included? If the repair requires multiple trades (roofing, drywall, painting, flooring, electrical), O&P at 10%/10% is industry standard
- Code upgrades - are current building code requirements addressed? Repairs must meet code at the time of repair, not at the time the home was originally built
- Pricing accuracy - are unit prices current and reflective of the local market? Xactimate prices are updated monthly, but some carriers lock in older pricing
- Depreciation calculation - if the estimate shows Actual Cash Value (ACV), verify that depreciation is applied correctly to individual line items rather than as a flat percentage across the entire claim
- All damaged components - check for soft metals (gutters, downspouts, window screens), HVAC equipment, fencing, interior water damage, and personal property
If anything appears incomplete or undervalued, policyholders have the right to challenge the estimate. A licensed public adjuster can review the insurance company's Xactimate estimate and prepare a supplemental estimate capturing everything the carrier missed. Dependable Claims Specialists (DCS) provides free claim reviews and can quickly identify whether an insurance estimate reflects the full scope of damage or whether additional recovery is available.
Where DCS Steps In - and Why That Matters
This guide gives you the framework. The execution is where most policyholders hit a wall, and that is the gap we close. Knowing what evidence matters is one thing; having the equipment, the procedural discipline, and the supplement letter that gets the carrier to actually act is another.
What we do that is difficult to replicate on your own:
- Calibrated documentation. Close-up photography with scale references, moisture meter and infrared scanning where applicable, ASTM-grade material sampling, and the photographic record that actually reflects what the storm or peril did to your property - not what a quick walk-around captured.
- Specialist coordination. Forensic roofers, engineers, hygienists, code consultants - we know which experts the Texas market and the carrier respects, and when bringing one in is cost-justified by the loss size.
- The supplement letter that gets it paid. A written supplement that addresses the carrier's stated basis line by line, references the policy language directly, and attaches the evidence in the order that supports each point. Vague re-assertions rarely move the carrier; this document does.
- Procedural deadline tracking. Texas Insurance Code Chapter 542 prompt-payment deadlines, the policy's own suit-limitation clock, the appraisal-clause invocation procedure, and (if litigation becomes necessary) the Chapter 542A pre-suit notice window all run in parallel. Missing one can permanently limit recovery.
- Appraisal invocation when appropriate. Once a dispute is properly framed as an amount-of-loss question, appraisal is often the fastest path to a binding award. We know when to invoke it, how to invoke it in writing, and which appraisers and umpires the Texas market respects.
A free claim review costs nothing. Public adjuster fees in Texas are contingent and capped by statute at 10% of recovery under Texas Insurance Code Chapter 4102 - no upfront cost, no hourly billing, no fee unless additional funds are recovered. If we review your file and conclude the carrier's position is defensible on the facts, we will tell you that directly and you owe nothing. The downside of a 15-minute review is zero. The downside of accepting an undocumented offer can be tens of thousands of dollars - or in a major-event claim, six figures.
We treat every conversation with the respect a property loss deserves. A claim is not just a paperwork exercise; it is a home, a business, a livelihood. Call 833-4UR-LOSS or request a review at dcspia.com/hire-dcs. Texas Firm License #3134924. Florida Firm License #W820363. Educational only, not legal advice. Results vary and depend on the specific policy, facts of loss, and the carrier's evaluation.
Frequently Asked Questions
What is Xactimate in insurance claims?
Xactimate is property damage estimating software made by Verisk Analytics. It is the most widely used estimating tool among U.S. insurance carriers, public adjusters, and restoration contractors, with localized pricing across a large number of U.S. geographic zones. Xactimate produces the itemized estimates that typically determine claim settlement amounts.
Why is my insurance estimate lower than my contractor's bid?
Insurance Xactimate estimates are frequently 30% to 50% lower than actual repair costs because carriers omit legitimate line items such as general contractor overhead and profit (10%/10%), building code upgrades, content manipulation, permit fees, and soft metal replacement. A public adjuster can identify these omissions and prepare a supplemental estimate.
What is overhead and profit in Xactimate?
Overhead and Profit (O&P) is a standard 10% overhead and 10% profit markup added to Xactimate estimates when a general contractor must coordinate multiple trades (roofing, drywall, painting, etc.). Insurance companies frequently omit O&P to reduce payouts, but industry guidelines recognize it as standard when three or more trades are involved.
Can I get my own Xactimate estimate for an insurance claim?
Yes. Policyholders can hire a licensed public adjuster to prepare an independent Xactimate estimate. Public adjusters use the same software and pricing databases as insurance companies but work exclusively for the policyholder, ensuring every legitimate line item is included. This estimate becomes the basis for negotiating a higher settlement.
How many price zones does Xactimate have?
Xactimate contains localized pricing across a large number of U.S. geographic price zones. Prices are updated regularly by Verisk Analytics based on contractor pricing data, material supplier costs, and labor market surveys. This means repair costs in Houston differ from Dallas, Miami, or any other market - and using the correct zone is essential to an accurate estimate.
