What Is Xactimate — and Why Your Contractor's Estimate Looks Different

What Is Xactimate — and Why Your Contractor's Estimate Looks Different

Short answer

Xactimate is the estimating platform most insurance adjusters and restoration contractors use to price a loss. It builds an estimate from a database of line items with regional unit prices. Contractor bids differ from it for three legitimate reasons: missed scope, price list lag, and line items the software has but the adjuster didn't include. All three are addressable.

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How Xactimate works

Xactimate prices a job by assembling **line items** — each with a unit price for a defined unit of work, in a specific geographic price list, updated periodically.

A drywall repair might look like:

- Remove drywall, per square foot

- Hang 1/2" drywall, per square foot

- Tape, float, texture, per square foot

- Seal and paint, two coats, per square foot

Each line has a unit price for the Seattle price list, and typically breaks into material, labor and equipment. The estimate totals the lines, then applies overhead and profit where appropriate, then subtracts depreciation and your deductible.

**What it's good at:** consistency and auditability. Two adjusters pricing the same scope should land in a similar place, and every line is traceable.

**What it's not:** a bid. It's a pricing framework applied to a scope. The scope is written by a person, and that's where estimates diverge.

The three reasons a contractor's number is higher

1. Missed scope — the most common by far

Xactimate prices exactly what's entered. If the adjuster's scope omits something, the estimate omits it.

Routinely missed on real losses:

- **Contents manipulation** — moving and protecting belongings so work can happen

- **Detach and reset** — removing and reinstalling fixtures, cabinets, appliances rather than replacing them

- **Access and containment** — floor protection, zip walls, negative air

- **Debris haul and dumpster**

- **Substrate prep** — self-leveling underlayment, flattening for tile. Very often omitted, and not optional if the tile is going to sit flat.

- **Waterproofing membrane** on a shower rebuild

- **Blocking and framing corrections** discovered during demo

- **Permits and inspections**

- **Matching work in adjoining areas** — see our post on matching coverage

- **Supervision and project management** on a multi-trade job

**The fix:** a line-by-line comparison between the adjuster's scope and the contractor's scope, with photographs supporting every added line, submitted as a supplement.

2. Price list lag

Xactimate price lists update on a schedule. In a period of rising material or labor cost, or after a regional event that spikes demand, the published unit price can trail what work actually costs.

**The fix:** documentation. Actual supplier quotes, actual subcontractor bids, actual labor rates. A carrier can adjust a unit price when there's evidence, but not on assertion alone.

3. Different assumed quality or method

The estimate says "cabinets, per linear foot." What grade? "Tile, per square foot" — set how, on what substrate?

A restoration contractor bidding the insurance price list and a builder bidding to remodel standard are describing different work. Where your pre-loss finishes were higher grade than the estimate assumes, that's a documentable difference — which is exactly why photographs of the pre-loss condition matter so much.

The three gaps, summarized

Reading your adjuster's estimate

You're entitled to a copy. What to look for:

**The scope section.** Room by room, line by line. Walk your house with it. Is every damaged area listed? Are the dimensions right?

**RCV vs. ACV.** Replacement Cost Value is what it costs to rebuild. Actual Cash Value is RCV minus depreciation. If you have replacement cost coverage, the depreciation is usually recoverable once the work is completed and documented — but it is typically paid *after*, not before.

**Depreciation.** Applied per line based on age and useful life. Excessive depreciation on a recently renovated area is challengeable — with documentation of when it was renovated.

**Overhead and profit.** On a multi-trade job requiring a general contractor, O&P — commonly 10% and 10% — should generally be included. Some carriers omit it initially on jobs where it's warranted. This is a standard and frequently successful item to raise.

**The deductible,** subtracted once.

The reconciliation process, step by step

1. **Get the full estimate** from your adjuster, including the line-item detail.

2. **Give it to your contractor** and ask for a line-by-line comparison against their own scope.

3. **Photograph everything** that supports the differences — pre-loss finishes, discovered damage, existing substrate conditions.

4. **Build the supplement** as a document: each added or adjusted line, the reason, the supporting photo, the supporting quote.

5. **Submit it through your contractor** or directly, and ask for a written response on each line.

6. **Escalate if needed** — a supervisor, a reinspection, or an appraisal clause invocation if the policy has one.

Most supplements on a real loss are approved at least in part, because most of them are correcting genuine scope omissions rather than arguing about price.

What not to do

**Don't sign a contract with a number based on an estimate you haven't reconciled.** If your contractor agrees to build for the adjuster's number and the scope is short, something has to give — and it will be the quality of the work.

**Don't let a contractor tell you they'll "handle the insurance company" without showing you the documents.** It's your claim and your house. You should see every submission.

**Don't accept "insurance won't pay for that" without a written reason.** Ask which policy provision, and ask for it in writing.

**Don't let the file go quiet.** Claims stall. A weekly written check-in on an open item keeps it moving, and it creates a record.

How Fortress Build & Finish works with an adjuster's estimate

We read the estimate line by line against what the job actually takes, and we document the differences with photographs and supplier quotes rather than argument. Substrate prep, waterproofing, containment and detach-and-reset are the four we find missing most often, and all four are the difference between a rebuild that lasts and one that looks fine at final walkthrough.

We keep the loss scope and any elective upgrades documented separately from the start, because that separation is what lets the carrier settle their portion cleanly and lets you decide about the rest without confusing the two.

Frequently asked questions

What is Xactimate?

Estimating software used by most insurance adjusters and restoration contractors to price property losses from a database of line items with regional unit prices.

Why is my insurance estimate lower than my contractor's bid?

Usually missed scope — items the adjuster didn't include, like substrate prep, containment, detach-and-reset or permits. Sometimes price list lag or a different assumed quality level.

Can I get a copy of the adjuster's Xactimate estimate?

Yes. Ask for the full line-item detail, not just the summary page. You're entitled to see how your claim was priced.

Should the insurance estimate include overhead and profit?

On a multi-trade job that requires a general contractor to coordinate, O&P — commonly 10% and 10% — is generally warranted. Some carriers omit it initially, and it's a standard item to raise.

What is recoverable depreciation?

The difference between Replacement Cost Value and Actual Cash Value. With replacement cost coverage, it's typically paid after the work is completed and documented — so the first check is usually not the full amount.

Related Reading

- Insurance Supplements: What to Do When the Scope Misses Damage

- How to Read a Construction Estimate: Line Items, Allowances, Contingency

- Filing an Insurance Claim for Fire or Water Damage: A Seattle Homeowner's Guide

- Do You Have to Use Your Insurer's Preferred Contractor?

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**About the author.** Ryan Watt is the marketing director at Fortress Build & Finish, a Seattle-owned finish contractor with more than 25 years in residential and commercial remodeling, custom carpentry, tile installation, and fire and water damage restoration.

*Fortress Build & Finish — (206) 426-2067 · Licensed, bonded and insured — License No. FORTRBF756KA · Serving Seattle, Ballard, Magnolia, Queen Anne, West Seattle, Capitol Hill, Wallingford, Bellevue, Kirkland, Renton, Shoreline, Edmonds and the surrounding communities · fortressbuildfinish.com*