Xactimate Estimates: What You Need to Know

What Is Xactimate?

Xactimate is the insurance industry's standard estimating software, developed by Verisk Analytics (formerly Xactware). It is used by the vast majority of insurance companies, independent adjusters, contractors, and Public Adjusters to prepare repair estimates for property damage claims. Xactimate contains a database of localized pricing for labor and materials, updated regularly to reflect current market conditions in each geographic area.

Because nearly everyone in the claims process uses Xactimate, it serves as a common language for discussing the cost of repairs. However, the tool is only as accurate as the person using it. An estimate prepared in Xactimate can vary wildly depending on who builds it, what line items they include, and whether they follow the software's own pricing methodology.

Why Insurance Xactimate Estimates Are Often Low

Receiving an Xactimate estimate from your insurance company does not mean the number is fair or complete. There are several common reasons why insurer-prepared estimates fall short of what the repairs will actually cost.

Insufficient Training

Many insurance adjusters receive only basic training on Xactimate. The software is powerful and complex, with thousands of line items and specific rules for how they should be applied. An adjuster who is not thoroughly trained may simply not know the correct line items exist for certain types of work.

Missing Line Items

This is the most common problem. The adjuster's estimate may omit necessary work entirely — failing to account for items like the removal and resetting of fixtures, furniture moving, floor protection during construction, temporary repairs, or the multiple steps involved in matching existing finishes. Each missing line item means money left off your claim.

Incorrect Measurements

If the adjuster does not take accurate measurements of the damaged area, the entire estimate will be based on wrong quantities. This is especially impactful for large areas — even a small measurement error on a roof or flooring claim can translate to thousands of dollars.

Wrong Material Specifications

Xactimate allows the estimator to select specific materials and quality levels. An adjuster who uses a standard-grade material when your home actually has premium-grade finishes will produce an estimate that does not cover the true cost of matching your existing property.

Controversial Line Items Insurers Fight Over

Certain Xactimate line items are frequent battlegrounds between policyholders and insurance companies. Understanding these disputes can help you identify when your estimate is short.

General Contractor Overhead and Profit (O&P)

When repairs require multiple trades — for example, a water loss that needs a plumber, a drywall contractor, a painter, and a flooring installer — a general contractor is typically needed to coordinate the work. The general contractor charges overhead (their cost of doing business) and profit. Insurance companies routinely try to deny O&P, claiming the homeowner can coordinate the trades themselves or that it is not warranted. In most cases involving multiple trades, O&P is appropriate and should be included.

Supervision

Insurance companies often claim that supervision is already included in the general contractor's overhead and profit. This is not accurate. General contractor O&P covers the general contractor's business expenses and profit margin. Supervision is a separate, trade-specific activity — it refers to the on-site management of the specific work being performed by each trade. These are different functions, and Xactimate has separate line items for them for a reason.

Content Manipulation and Cleaning

After a loss, personal property (contents) often needs to be moved, cleaned, stored, or manipulated to allow repairs to proceed. Insurers frequently underestimate or omit these costs. Moving furniture out of a room, cleaning smoke-damaged belongings, and packing and storing contents during a lengthy repair are all legitimate costs that should be in the estimate.

Waste and Debris Calculations

Construction generates waste. When you tear out damaged materials, there is cutting waste, packaging waste, and debris that must be hauled away. Xactimate has specific waste factors built into its pricing for many line items, but adjusters sometimes override these or fail to include proper debris removal line items. Proper waste and debris calculations are part of the actual cost of the repair.

Matching

When only part of a surface is damaged, the repaired area must match the undamaged area. If your damaged kitchen floor tile is no longer manufactured, or the repaired section of your roof does not match the weathered existing shingles, the repair is not complete. Many policies — and California regulations — require the insurer to pay for matching. Adjusters frequently underestimate or ignore matching costs in their Xactimate estimates.

The Xactimate User Agreement

Xactimate comes with a user agreement and pricing methodology that all users are supposed to follow. This methodology establishes how line items should be selected, how pricing is applied, and what the database prices are intended to represent. Many adjusters do not follow these guidelines — they cherry-pick line items, manually override pricing, or use the software in ways that contradict the methodology.

When an insurer's estimate departs from Xactimate's own guidelines, that departure can be used to challenge the estimate. A knowledgeable Public Adjuster or contractor can identify where the adjuster strayed from the methodology and use that as leverage in negotiations.

What You Should Do

Do not treat an Xactimate estimate as gospel simply because it came from your insurance company or because it was generated by professional software. The estimate is only as good as the person who prepared it. Get an independent review, compare line items, check measurements, and verify that the material specifications match what is actually in your home. If you are dealing with a significant claim, working with an experienced Public Adjuster who is proficient in Xactimate can make a substantial difference in your settlement.