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Demystifying Xactimate: A Homeowner's Guide to Understanding Insurance Claims Estimation Software



Demystifying Xactimate and Insurance Claims
Demystifying Xactimate and Insurance Claims

When an insurance policyholder files a claim for water or fire damage to their home they are pulled into a mystical world. Damages to a home thrust the claimant upon an unplanned journey with many unique characters. When the damages are inspected and the contractor’s estimates are produced, the homeowner will come face to face with a creature known as Xactimate. Xactimate is a widely used software in the insurance industry for estimating the cost of mitigation and repairs. This article will demystify Xactimate and help homeowners gain a better understanding of the insurance claims process. 


Here are some key points that homeowners should understand about Xactimate for insurance claims:


  • Estimation Software. Xactimate is an estimation software designed for property claims. It helps estimators and adjusters calculate the cost of repairs or replacements based on various factors such as labor, materials, and regional pricing. United Policyholders states, “Xactimate® is a computer software system for estimating construction costs that has become widely used by insurance companies in the past decade. Insurance company adjusters use it to calculate building damage, repair, and rebuilding costs.”

  • Industry Resource. Xactimate is widely utilized in the insurance claims and contracting industry. Many insurance companies use it to provide consistency and accuracy in estimating costs. Homeowners may encounter it when dealing with claims for damages covered by their insurance policies. 

  • Detailed Estimates. The software allows for detailed itemization of costs, breaking down expenses into categories such as roofing, flooring, plumbing, and more. This detailed breakdown helps both homeowners and insurance adjusters understand the scope and cost of repairs. In a prior blog post, ARES stated, “Often for insurance claims an estimating software called Xactimate is utilized. Xactimate utilizes unit-based pricing that is composed of room-by-room and line-by-line. In contrast to the one-page document for the lump sum estimate for repairs, a similar repair would be several pages.” The reader can refer to this article for examples of the difference between a typical remodeling estimate and an insurance claim estimate written in Xactimate. 

  • Pricing Database. Xactimate maintains a pricing database that includes the costs of labor and materials specific to different regions. This helps ensure that the estimates are reflective of the current market conditions in a particular area.

  • Adjuster's Tool. Insurance adjusters often use Xactimate to generate estimates quickly and efficiently. Homeowners may see estimates produced using this software as part of the claims process. We reference a quote from State Farm in a prior blog, where they clarify determining the cost of repairs. 

“The most appropriate way to estimate the replacement cost of your home is to hire a building contractor or other building reconstruction professional to produce a detailed replacement cost estimate.”

  • Communication Tool. Xactimate provides a standardized way for insurance professionals, contractors, and homeowners to communicate about the scope and cost of repairs. This helps in streamlining the claims process and ensuring clarity for all parties involved. The DYOJO Podcast shared insights on how Xactimate can be utilized by contractors, homeowners, and adjusters as a communication tool.


  • Review and Negotiation. Homeowners should review Xactimate estimates carefully. If they believe that certain aspects of the damage or required repairs are not adequately covered, they have the right to discuss and negotiate with their insurance adjuster. Read more about how contractors and insurance claims representatives can better work with each other to help homeowners restore their homes from this article in Property Casualty 360 magazine

  • Contractor Familiarity. Many contractors in the restoration and construction industry are familiar with Xactimate. This can be beneficial for homeowners as contractors who are experienced with the software may be better equipped to work within the framework of the estimates. In a prior blog we shared some insights for choosing the right insurance claims restoration contractor

Homeowners need to be proactive in the claims process, ask questions about the estimates provided, and communicate effectively with their insurance adjusters to ensure that their property is restored properly and fairly compensated for covered damages. The reader should refer to our prior blog post if they would like more information about the insurance claims estimating process.



Contact ARES to assistance with Insurance Claims
Contact ARES to assistance with Insurance Claims

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