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When it comes to estimating restoration jobs, Xactimate is the most popular estimating software in the restoration industry. But how did this software become a trusted tool in the industry? And how can restoration contractors best use Xactimate? Here is more about the software and advice that One Claim Solutions’ co-founder Jeremy Traasdahl has for restoration contractors using Xactimate.
The estimating system Xactimate was first released in 1986 by Xactware. Over time, the software gained popularity among people in the property contracting and insurance industry. In 2006, the company Insurance Services Office, Inc. (ISO) bought Xactware and its software. Two years later, Verisk Analytics was founded to act as the parent company for ISO and Xactware. Today, over 75 percent of restoration contractors use Xactimate, according to C&R and KnowHow’s 2023 State of the Industry Report. The use of Xactimate is also widespread among insurance providers.
Xactimate is popular among restoration contractors for a reason. It’s a comprehensive estimating tool that offers a variety of features for its users, including estimate creation, sketching, documentation, local pricing data, and more.
“Insurance carriers are used to reviewing and auditing Xactimate-style estimates,” Jeremy says. Submitting an estimate in a style that most adjusters are already familiar with can help restorers avoid extra complications when negotiating with insurance providers.
One of the benefits that Xactimate boasts is that it has local pricing databases that contractors can use to base their pricing on. While Xactware shares some general information about how their pricing databases are created, they have never shared a more extensive explanation of their methodology with users.
“Our Pricing Data Service Team reports cost information based on actual prices and transactions (completed bids) that have occurred recently in your area,” Verisk’s site says. They also mention they use “market research” based on several factors, including “thousands of in-field estimates submitted through Verisk every day.”
Let’s take a look at who is submitting estimates to Verisk. According to Verisk’s 2016 Property Report, 89 percent of the parties that uploaded estimates to Xactanalysis were independent or staff adjusters. Only 11 percent of estimates were uploaded by contractors, mitigation providers, or specialty providers.
This reveals a bias in the data Xactimate bases its pricing database on. When contractors and other restoration providers upload estimates to Xactimate, it is real pricing based on real work. But estimates uploaded by adjusters are comparative estimates made in response to a restorer’s invoice. Since adjusters always aim to pay out as little as possible, the prices included in their comparative estimates are purposefully low.
By treating all estimates submitted to Xactimate as valid data for restorers to base their prices on, Xactimate ends up suggesting pricing that is notably lower than the true market average prices for these restoration services. This benefits the interests of insurance providers while working against the interests of restoration contractors and companies. “It has handcuffed the industry into a one-size-fits-all pricing structure,” Jeremy says. “That’s what carriers are leaning on.”
While Xactimate is far from a perfect estimating tool, that doesn’t mean contractors have to stop using it altogether. Instead, be strategic about how you use Xactimate. Restoration contractors who understand Xactimate’s limitations are better equipped to take advantage of the software’s benefits without falling victim to the tool’s biases.
Approach Xactimate’s pricing suggestions with a healthy degree of skepticism. If a suggested price seems low, it probably is. While Xactimate’s pricing databases can offer you some degree of insight, ultimately, you should always base your prices on your own work, factoring in supply and equipment expenses, time costs, and profit. Xactimate allows you to edit the prices item by item or do a global price change to adjust the price of all items on an invoice at the same time.
Understanding the benefits and limitations of using Xactimate to create your estimates is far from the end of the battle. You still have to negotiate with adjusters to try to get compensated fairly for your work. To learn more successful strategies for creating stronger invoices and dealing with adjusters, subscribe to One Claim Solution’s newsletter.
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Before coming to One Claim, I served as the Director of Engineering at Slingshot Technology, Inc., a company later acquired by WorkWave in 2021. My professional journey has spanned both emerging startups and established corporations, with a steadfast focus on cultivating high-trust, low bureaucracy teams and innovating technology using agile methodologies.
In my free time, you can find me flying drones, enjoying the outdoors, and spending time with my family.
Hello, my name is Cam, I’m the COO of One Claim Solution! I come from a management consulting background (Bain & Company) and hold an MBA from the University of Michigan. I have worked at a wide variety of organizations, from Fortune 500 to small-cap, in an equally wide variety of industries. I have over 15 years of experience in operations and strategic growth, and I have spent much of my career focused on developing high-performing tech-enabled service organizations through early stage and high growth phases.
Outside of work, my wife Brittny and I have four kids, ages 13 to 6. As residents of Mesa, Arizona, we love to ski and explore the national parks of the southwest!
Hello, my name is Dan, and I am the CEO of One Claim Solution. I am super excited by everything we are doing at OCS to be the market leading insurance billing specialist that advocates on behalf of our restoration contractors.
My professional experiences are predominantly corporate in nature. My career started at General Electric in finance and accounting. Immediately prior to joining OCS, I spent time as an investor at Bondcliff Partners and management consultant with Bain & Company. I also hold an MBA from the Kellogg School of Management at Northwestern University and got my BS in finance and accounting from Northeastern University.
Outside of the office, I enjoy spending time with my wife, two young children, and our family dog, Whiskey. We live in Charleston, SC and take advantage of the beautiful weather by spending as much time as possible outside at the beach or adventuring around town
Hi, I’m Josh! In 2016, I co-founded One Claim Solution with my partner Jeremy Traasdahl, and I serve as General Counsel of One Claim Solution. Working in the restoration industry, Jeremy and I saw contractors struggling to get paid quickly and fairly and we knew there was a need for change. We founded One Claim Solution to be this change and it’s been my privilege to see our company grow and to advocate for our clients as general counsel.
Outside of my passion for helping the restoration industry, I enjoy spending time outdoors, fly-fishing, hunting, skiing, and coaching my kids’ baseball teams. I’ve been married to my amazing wife for 20 years and we have a beautiful family of 5 children.
Hey, I’m Jeremy! In 2016, I co-founded One Claim Solution with my partner Josh Ehmke. Working in the restoration industry, Josh and I saw contractors struggling to get paid quickly and fairly and we knew there was a need for change. We founded One Claim Solution to be this change and it’s been my privilege to lead our amazing team.
Prior to One Claim Solution, I started my career as an inside sales rep for Avnet, then moved to Pepsico as a district sales manager. Outside of work, I love spending time with my wife and four children, two boys and two girls!