How to Read a Verisk White Paper: The Documentation Most Adjusters Have Never Seen

Every insurance adjuster in the United States who handles property claims uses Xactimate. It is the industry standard. Carriers require it. Training programs teach it. Adjusting firms build their entire workflows around it. When an adjuster hands you an estimate and tells you that your $85,000 repair is only worth $52,000, the number on that page almost certainly came out of Xactimate.

But here is something most policyholders — and a surprising number of attorneys — do not know: the company that makes Xactimate publishes its own white papers, methodology documents, user guides, and technical bulletins explaining exactly how the software works, how prices are calculated, what is and is not included in unit pricing, and how the software should be configured. These documents are publicly available. They are hosted on the company's own website. And they frequently support the policyholder's position more than the carrier's.

The reason this matters is simple. Carriers present Xactimate estimates as though the software itself has spoken — as though the number on the page is an objective, scientifically derived fact. But when you read the vendor's own documentation, you discover that Verisk itself says its prices are not guaranteed, that its unit costs do not include overhead and profit, that labor efficiency settings must be selected based on the specific characteristics of the job, and that the software is a tool that requires professional judgment — not a substitute for it.

These are not obscure internal memos. They are published white papers with the Verisk logo on the cover. And the fact that most carrier adjusters have never read them — while treating the software's output as gospel — is one of the great unexamined contradictions of the property insurance claims process.

What Verisk Is and Why It Matters

The Company Behind the Software

Verisk Analytics is the parent company that owns what was formerly known as Xactware Solutions. The Xactimate product line falls under Verisk's Property Estimating Solutions division. Historically, Xactware was also connected to Insurance Services Office (ISO), the organization that develops the standardized policy forms and endorsements used by most property and casualty insurers in the United States. While the corporate structure has evolved over the years, the essential point remains: the company that makes the estimating software also has deep institutional connections to the insurance industry itself.

This dual role matters. Verisk serves both sides of the claims transaction. It provides the tool that carriers use to generate estimates, and it publishes the pricing data that populates those estimates. At the same time, it produces documentation that explains the limitations, assumptions, and intended uses of its own products. That documentation is remarkably candid — more candid, in many cases, than the adjusters who rely on the software every day.

The Documentation Library

Verisk publishes a library of white papers, technical bulletins, and methodology documents through its Property Estimating Solutions division. These documents are available through the Verisk website at verisk.com, through the Xactware eService Center at eservice.xactware.com, and through various industry channels. Key publications include:

• "Overhead and Profit: What Is and Isn't Included in Verisk Property Estimating" — the O&P white paper
• "Labor Efficiencies Design" — the labor efficiency white paper
• "Labor Productivity in Xactimate Pricing" — the labor productivity white paper
• "Pricing Research Methodology" — the pricing methodology white paper
• "Pricing Methodology Summary" — a condensed version of the pricing methodology documentation
• "Overhead and Profit Settings on Sales Tax in Xactware Products" — technical guidance on O&P and tax settings
• "Sidestepping Extreme Pricing Shifts in Property Preservation" — guidance on pricing variability

Each of these documents is written by Verisk's own team, published under the Verisk brand, and intended to explain how the software and its pricing data actually work. They are not advocacy pieces written by plaintiff attorneys or public adjusters. They are manufacturer documentation. And that is precisely what makes them so powerful.

The Overhead and Profit White Paper

What It Says

The Verisk white paper titled "Overhead and Profit: What Is and Isn't Included in Verisk Property Estimating" is arguably the single most important Verisk publication for anyone involved in a property insurance claim dispute. It is available directly from Verisk's website as a PDF.

The document explains, in Verisk's own words, how overhead and profit are treated within Xactimate's unit pricing structure. The core statement is this: "The building cost data published by Verisk is not designed to be inclusive of sales tax, general O&P, or job-related O&P within the unit prices."

Read that carefully. Verisk is stating that its line-item prices — the individual unit costs for drywall, roofing, painting, flooring, and every other trade — do not include general contractor overhead and profit. O&P is designed to be added separately, on top of the estimate total. This is not an interpretation. It is not an opinion. It is the software vendor's own description of how its pricing data is structured.

The Three Categories of Overhead

The white paper identifies three distinct categories of overhead, and understanding the distinction is essential:

1. General Overhead: Expenses incurred by a general contractor that cannot be attributed to individual projects. These include office rent, utilities, office supplies, salaries for office personnel, depreciation on office equipment, licensing, insurance, and advertising. These costs are not included in any Xactimate line item. They are intended to be covered by the general O&P percentage applied to the estimate.
2. Job-Related Overhead: Expenses attributable to a specific project but not to a specific task within that project. Examples include project management, on-site portable offices and restroom facilities, temporary power, and dumpster rental. These costs are also not included in the unit prices and are intended to be covered by O&P or added as separate line items.
3. Job Personnel Overhead / Subcontractor O&P: Labor expenses not related to wage or burden — vehicle expenses, uniforms, hand tools, and mobile phones. This category is included in the labor overhead portion of each unit price. This is the only overhead category built into Xactimate's line-item pricing.

The significance of this structure cannot be overstated. When a carrier adjuster produces an Xactimate estimate without applying general contractor O&P, the estimate is missing an entire category of cost that Verisk itself says is not included in the unit prices. The adjuster is using the software in a way that contradicts the software vendor's own documentation.

Why This Contradicts the "Three-Trade Rule"

Many carriers deny O&P by invoking a so-called "three-trade rule" — the claim that overhead and profit are not owed unless three or more trades are involved. Verisk's white paper says nothing about a three-trade threshold. It does not condition the application of O&P on a specific number of trades. It simply states that general overhead and job-related overhead are not included in the unit prices and are typically added as a percentage of the total bid.

The Labor Efficiency White Papers

Labor Efficiencies Design

Verisk's "Labor Efficiencies Design" white paper explains one of the most consequential — and most frequently manipulated — settings in all of Xactimate: the labor efficiency selection.

Xactimate's original design provided a choice between two labor efficiency models:

• Restoration/Remodel/Service: Designed for repair and restoration work performed in occupied or partially occupied structures, where crews face the realities of working around existing finishes, contents, limited access, and the inherent inefficiency of repair work versus new construction.
• New Construction: Designed for ground-up construction on unoccupied sites, where crews have unrestricted access, can schedule work without coordination constraints, and operate at peak efficiency.

These two settings produce dramatically different labor costs across every line item in an estimate. The Restoration/Remodel setting produces higher labor costs because it accounts for the real-world conditions of repair work. The New Construction setting produces lower labor costs because it assumes conditions that simply do not exist on a typical insurance repair job.

Verisk has since expanded the architecture to include a third category — Large Restoration/Remodel— which sits between the other two settings and is designed for larger projects that share some characteristics of both restoration work and new construction. The Restoration Industry Association (RIA) released a white paper of its own analyzing this new setting and its implications for contractors and adjusters.

Labor Productivity in Xactimate Pricing

The companion white paper, "Labor Productivity in Xactimate Pricing," goes deeper. It defines labor productivity as "the time needed to complete a task" and acknowledges that productivity "can be affected by many factors beyond the standard high-level differences between new construction and remodeling or repair, such as accessibility, location, and quantity of work being performed." The white paper further states that Xactimate's labor yields are based on a "common job size scenario" and that when a job is smaller than that scenario, additional labor should be added.

Why This Matters for Your Claim

When a carrier adjuster selects the New Construction or Large Restoration/Remodel labor efficiency setting for a standard repair project in an occupied home, every labor line item in the estimate is reduced — potentially by 15-30%. Verisk's documentation makes clear that the selection of labor efficiency settings is a matter of professional judgment based on actual job conditions, not a default to be set at the lowest possible value. When an adjuster selects a setting that does not match the real-world conditions of the repair, the adjuster is using the software contrary to the vendor's own guidance.

The Pricing Methodology Documentation

How Xactimate Prices Are Actually Calculated

Verisk's "Pricing Research Methodology" white paper pulls back the curtain on how the prices in Xactimate are actually determined. Understanding this methodology is essential for challenging a carrier's estimate, because it reveals both the strengths and the limitations of the pricing data.

According to the white paper, Verisk collects pricing data from multiple sources:

• Primary surveys: Phone, fax, and email surveys of labor providers, material suppliers, equipment vendors, contractors, subcontractors, and service providers
• Direct data feeds: Automated pricing feeds from suppliers
• Completed estimates: More than 400,000 estimates are returned to Verisk daily through Xactimate and XactAnalysis for real-time analysis
• Industry transactions: Actual invoices and closed project data

Verisk uses what it calls cluster analysisto process this data. The team analyzes all price submissions, identifies the largest group of prices from those submitted, and selects a point within that cluster. The stated goal is to provide "cost information reflective of the most common price recently submitted."

The prices are organized into area-specific price lists based on zip codes, with data updated monthly for general pricing and nightly for vendor-specific pricing. Each price list reflects local wage rates, material costs, and sales tax rates.

The Critical Admissions

The pricing methodology documentation contains several statements that directly undermine the way carriers use Xactimate pricing:

Prices are historical: As acknowledged in both the white paper and the End User License Agreement, Xactimate prices are based on historical data. By the time a monthly price list is published and downloaded, the underlying data is already at least 30 days old. In volatile markets — particularly after catastrophic events when material and labor costs spike — the published prices may significantly lag behind actual market conditions.

Prices are averages, not guarantees: Verisk describes its published prices as targeting "the most representative price of the various price points collected." This means that some market prices are higher and some are lower than what Xactimate reports. The price is a central tendency, not a ceiling. When a carrier treats Xactimate pricing as the maximum it will pay, it is misusing a tool that Verisk itself describes as a starting point.

Prices may not reflect local conditions: The EULA acknowledges that local market conditions may vary from the published prices. This is a significant caveat. A contractor in a high-cost metropolitan area may charge materially more than the Xactimate price list reflects, and Verisk itself says this is expected.

The EULA disclaimer: Section 12.3 of the Xactware End User License Agreement states plainly: "We do not warrant the accuracy of pricing information in the Price Data." The company that publishes the prices does not guarantee that they are accurate. This single sentence has profound implications for any claim dispute in which the carrier insists that Xactimate pricing is the final word on repair costs.

How to Find These Documents

Where to Look

Verisk does not hide its white papers. They are available through several channels:

1. Verisk's website: Navigate to verisk.comand search for "Property Estimating Solutions." The white papers are hosted as PDF downloads under the Property Estimating Solutions section of the site. Direct URLs for key documents include:
   • O&P White Paper: verisk.com/siteassets/media/downloads/property-estimating/overhead-and-profit.pdf
   • Labor Efficiencies Design: verisk.com/siteassets/media/downloads/property-estimating/labor-efficiencies-design.pdf
   • Labor Productivity: verisk.com/siteassets/media/downloads/property-estimating/labor-productivity-in-xactimate-pricing.pdf
   • Pricing Research Methodology: verisk.com/siteassets/media/downloads/property-estimating/pricing-research-methodology.pdf
2. Xactware eService Center: The eService Center at eservice.xactware.com hosts copies of white papers and technical documents, often organized by publication year.
3. The Xactware EULA: The End User License Agreement is published at verisk.com/privacy-policies/xactware-eula. Section 12.3 contains the critical pricing accuracy disclaimer.
4. Xactware Help Documentation: The help portal at xactware.helpdocs.io and xactprm.xactware.help contain user-facing documentation on settings, features, and pricing methodology.

What to Search For

If you cannot locate a specific document through direct navigation, use these search terms on Verisk's site or through a general search engine:

• "Verisk overhead and profit white paper"
• "Xactimate labor efficiencies design"
• "Verisk pricing research methodology"
• "Labor productivity in Xactimate pricing"
• "Xactimate pricing methodology summary"
• "Verisk property estimating" followed by the specific topic you are researching

How to Request Documents

If you cannot find a document publicly, you have options:

• Contact Verisk directly: Verisk's Property Estimating Solutions team can be reached through the contact information on their website. As a software vendor, they have an interest in ensuring their documentation is properly understood and applied.
• Discovery and appraisal: In litigation, Verisk's documentation can be requested through standard discovery. In appraisal, these documents can be presented as exhibits supporting your appraiser's methodology.

The Restoration Industry Association

The Restoration Industry Association (RIA) at restorationindustry.orgis an important ally in this space. RIA's Advocacy and Government Affairs (AGA) Committee has been actively engaged with Verisk on behalf of the restoration industry, achieving several meaningful outcomes:

• Restoration of EULA language clarifying that Xactimate prices are historical baseline estimates, not definitive market values
• Transparent disclaimers about when and how pricing data is updated
• Removal of "New Construction" as the default setting for certain Xactimate integrations
• Publication of educational resources on pricing methodology and labor efficiency

RIA also publishes its own white papers and position statements analyzing Verisk's documentation and providing guidance to restorers and adjusters. Their Xactimate Resources page and Independent Pricing Task Force materials are valuable resources for anyone building a pricing challenge.

The organization Actionable Insights, accessible at getinsights.org, also publishes analysis of Verisk white papers and maintains a resource library that breaks down the key documents into accessible summaries.

How to Use These Documents in a Claim

The Power of "Your Own Software Vendor Says..."

The single most effective use of Verisk's documentation is in reframing the dispute. When a carrier adjuster tells you that Xactimate says the repair costs $52,000, and your contractor says it costs $85,000, the natural framing is "your number versus our number." That framing favors the carrier, because the carrier can point to a sophisticated software platform and imply that its output is objective.

Verisk's documentation breaks that framing. When you cite Verisk's own white papers, the conversation shifts. It is no longer your number versus the carrier's number. It is the carrier's position versus the carrier's own software vendor's documentation. And that is a much harder position for the carrier to defend.

Consider the difference between "your estimate is too low — our contractor says the job costs more" and "your estimate omits general contractor overhead and profit, and Verisk's own white paper states that its unit prices are 'not designed to be inclusive of sales tax, general O&P, or job-related O&P.'" The second version is far more difficult to dismiss.

Citing Specific Documents and Passages

When using Verisk documentation in a demand letter, appraisal submission, or litigation brief, precision matters. Do not simply reference "Verisk's white papers" in general terms. Instead:

• Identify the document by title: "Verisk's white paper titled 'Overhead and Profit: What Is and Isn't Included in Verisk Property Estimating'"
• Quote the specific language: Include the exact text from the document, set off in quotation marks or as a block quote
• Reference the page number: If the document has page numbers, cite them
• Attach the document: Include the white paper as an exhibit to your demand letter or appraisal submission
• Note the publication source: Indicate that the document is available on Verisk's own website and provide the URL

This level of specificity accomplishes two things. First, it demonstrates that you have actually read and understood the documentation — which immediately distinguishes you from the vast majority of claimants and, candidly, from many adjusters. Second, it makes it very difficult for the carrier to argue that the document is not authoritative. The carrier cannot claim that Xactimate pricing is definitive while simultaneously dismissing the Xactimate vendor's own guidance on how that pricing should be understood.

In Demand Letters

A well-constructed demand letter should use Verisk documentation to support specific challenges:

• O&P disputes: Quote the O&P white paper's statement that unit prices do not include general O&P or job-related O&P. Attach the white paper as an exhibit. Explain that the carrier's own estimating tool was never designed to produce a complete estimate without the separate addition of O&P.
• Labor efficiency disputes: Quote the labor efficiency white paper's description of when Restoration/Remodel settings are appropriate. If the carrier used New Construction or Large Restoration/Remodel settings on a standard repair job, cite the vendor's guidance on how settings should be selected.
• Pricing disputes: Quote the EULA's Section 12.3 disclaimer. Reference the pricing methodology white paper's acknowledgment that published prices are historical averages that may not reflect local market conditions. Argue that the carrier cannot treat Xactimate prices as a cap on repair costs when the vendor itself does not warrant their accuracy.

In Appraisal Proceedings

Appraisal is often the most productive venue for Verisk documentation. Unlike litigation, appraisal is typically less formal and more focused on the merits of the estimate dispute. An appraiser or umpire who is presented with Verisk's own documentation is likely to give it significant weight — particularly when the opposing appraiser is using Xactimate to support a lower valuation.

Consider preparing a brief reference packet that includes:

• The O&P white paper
• The labor efficiency white paper
• The pricing methodology white paper
• Relevant excerpts from the EULA
• A cover memo explaining how each document applies to the specific dispute

This packet serves as both an educational tool and an advocacy document. Many appraisers and umpires — even experienced ones — have never seen these white papers. Presenting them for the first time in an appraisal hearing can be a decisive moment.

In Litigation and Discovery

In litigation, Verisk's documentation serves as exhibit material for expert reports, impeachment material for cross-examination, and support for motions and briefs. If the carrier's adjuster testifies that Xactimate pricing is reliable and that O&P is not owed, Verisk's own white papers provide ready-made impeachment: "You rely on Xactimate for your pricing, correct? Are you aware that Verisk's own white paper states that its unit prices are not designed to include general contractor overhead and profit?"

Discovery requests should also target the carrier's internal Xactimate training materials. Compare what the carrier trains its adjusters to do with what Verisk's documentation says the software is designed to do. Gaps between the two can be revealing.

Why Most Adjusters Have Never Read These Documents

The Training Gap

The property insurance adjusting industry processes millions of claims per year. Many carrier adjusters — particularly those handling high volumes of residential property claims — receive their Xactimate training through internal programs developed by the carrier or by third-party adjusting firms. These training programs focus on how to use the software: how to build a sketch, how to select line items, how to apply pricing. They typically do not include a review of the vendor's white papers on pricing methodology, overhead and profit structure, or labor efficiency design.

This is not unusual in any industry. But in the context of insurance claims, the gap has meaningful consequences. An adjuster who has never read Verisk's O&P white paper may genuinely not know that unit prices are not designed to include general contractor overhead and profit. The result is that many adjusters apply the software based on institutional custom rather than manufacturer guidance.

Volume and Time Pressure

A typical staff or independent adjuster manages dozens or even hundreds of open claims at any given time. In that environment, there is little incentive — and less time — to read white papers or compare manufacturer documentation against institutional training. The adjuster opens Xactimate, builds the estimate using the settings taught in training, and moves on to the next file. This is a systemic issue, not an individual failing.

The Tension

There is an underlying dynamic that explains, at least in part, why carrier training programs may not emphasize Verisk's documentation. Consider what happens when an adjuster reads Verisk's O&P white paper and learns that unit prices do not include general contractor overhead and profit. Or when an adjuster reads the labor efficiency documentation and learns that Restoration/Remodel settings are appropriate for the vast majority of insurance repair jobs. Or when an adjuster reads the EULA and learns that Verisk does not warrant the accuracy of its pricing data.

Each of these discoveries, if applied consistently, would tend to produce higher estimates. Higher estimates mean higher claim payments. Higher claim payments affect loss ratios, which affect profitability.

None of this suggests that any particular carrier has made a deliberate decision to keep its adjusters uninformed about vendor documentation. But the incentive structure of insurance claims handling does not naturally encourage adjusters to seek out information that would increase the amounts they pay. The documentation exists. It is publicly available. And there are understandable, if unfortunate, reasons why it has not been widely integrated into carrier training programs.

The Fundamental Irony

There is a contradiction at the heart of how the insurance industry uses Xactimate, and it is worth stating plainly.

Carriers rely on Xactimate as the authoritative tool for estimating property repair costs. They require their adjusters to use it. They present its output to policyholders as though it represents an objective determination of what repairs should cost. When a policyholder challenges the estimate, the carrier's implicit — and sometimes explicit — position is that Xactimate has spoken, and the number it produced is the number.

But when the policyholder points to Xactimate's own vendor documentation — documentation that says unit prices do not include O&P, that labor efficiency settings must be selected based on actual job conditions, that published prices are historical averages that are not guaranteed to be accurate, and that the EULA specifically disclaims any warranty of pricing accuracy — the carrier's enthusiasm for Xactimate's authority tends to diminish.

You cannot have it both ways. You cannot treat the software as the final word on pricing while ignoring the software vendor's own guidance on what that pricing does and does not include. You cannot cite the tool as authoritative while refusing to read the manual.

This is the leverage that Verisk's documentation provides. It does not require you to prove that the carrier acted in bad faith. It does not require expert testimony about construction costs. It simply requires you to read the vendor's own publications and point out that the carrier's estimate does not comply with the vendor's own guidance. The carrier chose the tool. The tool comes with documentation. The documentation supports your position.

A Practical Checklist

For policyholders, public adjusters, and attorneys handling a property insurance claim dispute, here is a practical checklist for using Verisk's documentation:

1. Obtain the key documents.Download the O&P white paper, labor efficiency white paper, labor productivity white paper, and pricing methodology documentation from Verisk's website. Save copies — URLs can change, and you want permanent records.

2. Read the EULA. Pull up Section 12.3 of the Xactware EULA and note the pricing accuracy disclaimer. Print it. Highlight it.

3. Check the carrier's estimate settings.Identify the labor efficiency setting used in the carrier's estimate. If it is set to anything other than Restoration/Remodel/Service for a standard repair job in an occupied structure, you have a challenge supported by Verisk's own documentation.

4. Check for O&P.If the carrier's estimate does not include general contractor overhead and profit, cite the O&P white paper's statement that unit prices are not designed to include general O&P or job-related O&P. The estimate is incomplete by the vendor's own standards.

5. Check the pricing against actual market conditions. If the Xactimate prices do not reflect what local contractors are actually charging, cite the pricing methodology documentation and the EULA to establish that Xactimate prices are historical averages that may not reflect current local market conditions.

6. Build your demand.Incorporate specific quotes and page references from Verisk's documentation into your demand letter. Attach the relevant white papers as exhibits.

7. Prepare for appraisal or litigation.Assemble a reference packet of Verisk documentation. Prepare to use it for cross-examination of the carrier's witnesses and as support for your own expert's methodology.

8. Contact the RIA.If you are a contractor or restorer, the Restoration Industry Association's Advocacy and Government Affairs Committee and their Xactimate Resources page provide additional tools and guidance.

Conclusion

The documents discussed in this article are not secret. They are not privileged. They are not hidden behind paywalls or locked in filing cabinets. They are published by one of the largest analytics companies in the insurance industry, available to anyone who takes the time to look for them.

When you walk into an appraisal hearing or draft a demand letter with Verisk's own white papers in hand, you are bringing the software vendor's voice into the room. You are not arguing against Xactimate. You are arguing that the carrier should use Xactimate the way its own creator says it should be used. That is a position that is very difficult to argue against — and it is available to anyone who takes the time to read what Verisk has already published.

This article is intended for informational purposes only and does not constitute legal advice. Policyholders with disputed claims should consult with a licensed public adjuster or an attorney experienced in insurance coverage law.