How to Read an Xactimate Estimate Line by Line

Introduction

If you have filed a property insurance claim, you have almost certainly received an Xactimate estimate. Our overview of Xactimate explains what the software is and why it matters. This article is different — it is a practical, line-by-line walkthrough of what you are actually looking at when you open an Xactimate estimate.

The estimate controls how much money you receive. Every line item, selector code, quantity, and price directly affects your payout. If you cannot read the estimate, you cannot evaluate whether it is accurate — and you cannot identify what is missing.

The Header: Claim Information and Pricing Region

Every Xactimate estimate begins with a header identifying the claim: claim number, date of loss, insured name, and the adjuster who wrote it. But the most important item in the header is the price list / pricing region.

Xactimate prices are not national — they vary by geographic region and zip code. The pricing region determines every single price in the estimate. A shingle that costs $3.50 per square foot in one zip code may cost $4.25 in another. If the wrong pricing region is set, every price in the estimate is wrong.

Line Item Structure

Each line item represents one specific repair activity or material and follows a consistent structure:

• Selector code— a shorthand code identifying the item (e.g., “RFG LAMI25” = roofing, laminate 25-year shingle).
• Description— plain-English explanation (e.g., “Remove & replace laminated - 25 yr shingles”).
• Quantity— how much of the item is included.
• Unit— the unit of measurement: SF (square foot), LF (linear foot), EA (each), or SQ (square = 100 SF, common for roofing).
• Unit price— cost per unit from the Xactimate pricing database for the specified region.
• Total— quantity times unit price.

How to Read Selector Codes

Selector codes look cryptic but follow a consistent pattern. The first part identifies the trade category; the remainder identifies the specific item. Common prefixes:

• DRY — Drywall
• PLM — Plumbing
• ELC — Electrical
• RFG — Roofing
• PNT — Painting
• FLR — Flooring
• CLN — Cleaning
• DMO — Demolition
• WDR — Water damage restoration / mitigation
• FRM — Framing
• INS — Insulation
• CBN — Cabinetry
• CTR — Countertops
• WND — Windows
• EXT — Exterior siding and trim

After the prefix, the code gets more specific. “DRY 1/2” is standard 1/2-inch drywall; “DRY 5/8FR” is 5/8-inch fire-rated. Learning common codes helps you read estimates faster and catch situations where the wrong code was used.

RCV and ACV Columns

Most estimates include two value columns:

• RCV (Replacement Cost Value)— the full cost to replace the item with new, like-kind-and-quality materials and labor, with no deduction for age.
• ACV (Actual Cash Value)— replacement cost minus depreciation. This is the initial payment on a replacement cost policy. See our article on ACV vs. RCV for a detailed explanation.

On a replacement cost policy, the carrier pays ACV first; the policyholder recovers the depreciation holdback after completing repairs. On an actual cash value policy, ACV is the full settlement.

The Depreciation Column

Depreciation is shown as both a percentage and dollar amount per line item. A critical point: depreciation should vary by item. A 20-year-old roof that has reached the end of its useful life depreciates heavily. Five-year-old cabinets in good condition should depreciate far less. Recently applied paint might have minimal depreciation.

Overhead and Profit

O&P represents the general contractor’s compensation for managing the repair project. It usually appears as a separate section at the bottom: 10% overhead and 10% profit (compounding to approximately 21%). This is the industry standard, often called “10 and 10.”

Carriers frequently exclude O&P, arguing the loss does not require a general contractor. This is one of the most disputed areas in property claims. For a detailed discussion, see our article on overhead and profit.

Remove & Replace vs. Remove & Reinstall vs. Detach & Reset

These three operations have very different costs, and carriers sometimes use the cheaper code when the more expensive one applies:

• Remove and replace (R&R)— the item is removed, discarded, and a brand-new item is installed. Most expensive because it includes new material. Used when the existing item is damaged beyond repair.
• Remove and reinstall (R&RI)— the item is carefully removed, set aside, and reinstalled after other work. No new material purchased. Used when the item is undamaged but must come out for access — like removing a toilet to replace flooring beneath it.
• Detach and reset (D&R)— similar to R&RI but for items that can be disconnected and moved without full removal. Typically less labor-intensive. Common for appliances and certain fixtures.

When reviewing an estimate, check whether each operation code matches what actually needs to happen. A carrier writing “detach and reset” for something that needs full removal and replacement saves the carrier money but leaves the policyholder with an inadequate repair.

Minimum Charge Items

Xactimate includes minimum charges for many trades. A tradesperson does not show up for a trivially small job — there is a minimum cost to mobilize, travel, and perform any work. An electrician will not come to replace one outlet cover for $15; a plumber will not make a service call for $47.

If a carrier estimate includes small trade items without minimum charges, those line items are below the real cost of getting a licensed professional to the property. Xactimate has minimum charge codes built into the system — if they are missing, that is a legitimate basis for a supplement.

Sales Tax

Tax typically appears as a separate line at the bottom, applied to materials at the local rate. In California, labor for construction and repair work is generally not subject to sales tax, but materials are. Verify the correct tax rate — rates vary by city and county. Some carrier estimates omit tax entirely; if materials are in the estimate, tax on those materials should be too.

The Sketch Section

Xactimate’s sketch module generates the measurements that drive line item quantities — room dimensions, wall lengths, floor areas, ceiling areas, and perimeters. The sketch shows:

• Room dimensions— length, width, and ceiling height.
• Perimeter— total wall length, used for baseboard, crown molding, and similar items.
• Floor area— square footage for flooring and carpet.
• Wall area— surface area for drywall, paint, and texture, calculated from perimeter and ceiling height minus openings.

Verifying the sketch is critical. If room dimensions are wrong, every quantity derived from them is wrong. Measure your rooms and compare. A room that is 14’ x 16’ but sketched as 12’ x 14’ produces significantly less square footage for drywall, paint, and flooring — and a significantly lower estimate.

Waste Factors

In construction, you never purchase exactly the amount of material needed. Cuts, miscuts, starter pieces, and irregular shapes all require additional material. Standard waste factors:

• Roofing shingles — 10–15%, higher for complex roofs
• Drywall — typically 10%
• Hardwood / laminate flooring — 10–15%, higher for diagonal installs
• Tile — 10–15%, higher for large format or intricate patterns
• Carpet — varies based on room layout and seam placement

How to Spot a Thin Estimate

A “thin” estimate lists some repairs but omits the supporting work required to do them properly. It looks detailed at first glance, but the gaps become apparent when you understand actual construction. Common omissions:

• Containment and protection— masking, plastic sheeting, floor protection for undamaged areas.
• Trim removal and replacement— baseboards, crown molding, and door casing that must come out for drywall or flooring work.
• Texture matching— if existing walls have orange peel, knockdown, or hand-applied texture, new drywall must match. This is labor-intensive and should be a separate line item.
• Paint prime coats— new drywall requires primer before finish paint. Carrier estimates sometimes include only the finish coat.
• Electrical and plumbing disconnects— outlets, switches, and fixtures must be disconnected before demolition and reconnected after.
• Permits and inspections— electrical, plumbing, and structural work typically requires permits in California.

For a comprehensive list, see our article on commonly missed items in insurance estimates. For guidance on how the scope of loss should be developed, see our scoping article.

How Xactimate Prices Are Set

Xactimate’s pricing database is updated monthly by Verisk based on surveys of regional labor rates and material costs. The prices reflect what contractors actually charge in a given area — which is why the pricing region matters so much.

However, the policyholder is not obligated to accept Xactimate pricing as the final word. Xactimate prices are survey-based averages. Actual contractor quotes may be higher, particularly after major disasters when demand spikes. If you have legitimate contractor bids exceeding Xactimate pricing, those bids are relevant evidence. The policy obligates the insurer to pay the reasonable cost of repair — not the Xactimate cost of repair.

Reading the Estimate Summary

The summary at the end totals everything:

• Line item total — sum of all items before O&P and tax
• Overhead — typically 10%
• Profit — typically 10% of total plus overhead
• Sales tax — on materials at the local rate
• RCV total — full cost before depreciation
• Total depreciation — sum across all line items
• ACV total — RCV minus depreciation (initial payment on RC policy)
• Deductible — subtracted from ACV
• Net claim — the amount the carrier actually pays

What to Do When the Estimate Is Wrong

If you have identified errors — missing items, incorrect quantities, wrong codes, removed waste, flat depreciation, missing O&P, or a wrong pricing region — you have the right to dispute it through a supplement. A properly scoped estimate from a licensed public adjuster or qualified contractor can document what the carrier missed. The supplement should be written in Xactimate using the same pricing database so the comparison is apples-to-apples.

Understanding how to read an Xactimate estimate is the first step toward knowing whether your claim is being handled fairly. You do not need to become an expert — but you need to know enough to ask the right questions and recognize when something is missing.