As hurricanes Harvey and Irma wind down and Jose approaches New England, thousands of homeowners will soon face the prospects of dealing with insurance adjusters who write scope and price deficient repair estimates on the clandestine software known as Xactimate. The vast majority of insurance companies have adopted this one software program that is confusing to homeowners and contractors alike. Over 80% of all repair estimates will be written on this program. In lieu of Xactimate we recommend using Excel workbooks and the critical path method for figuring damage claims.
In 2015, the Boston area received over 8 feet of snow 5 weeks. With temperatures below freezing many homes suffered huge damage and losses from ice dams and collapse due to the weight of snow and ice. Hundreds of catastrophe insurance adjusters descended upon our area to meet with homeowners. They came to assess the damage and prepare Xactimate cost estimates to repair damaged homes. Most were unfamiliar with local building rules, codes and regulations and very rarely produced estimates sufficient to restore insureds to the pre-loss condition. In fact we found that most first cost assessments from the insurance adjusters were on average 30% to 40% of the subsequent actual final claim settlement.
In my Insurance Claim Workshops, I taught dozens of contractors how to properly price insurance damage as a contractor consultant. Many of my contractor students helped their homeowner clients by producing accurate detailed estimates on Excel. These estimates were submitted to insurance companies and on average the insurance companies eventually paid out 3 times the original offer!
Fast forward to today, and we will see most insurance estimates for Hurricanes Harvey and Irma damage be way low on scope and price. When you get your initial insurance estimate the best thing to do if you are a homeowner or contractor is DO NOT TRUST THE XACTIMATE ESTIMATE. If you are a homeowner contact a local licensed and insured contractor to scrutinize the insurance estimate. If you are a contractor contacted to help a homeowner, go through the estimate carefully and if it does not make sense in comparison to what you see for damage let the homeowner know the differences. Then ask them if they want you to prepare a detailed estimate for a fee.
Charging a fee to complete detailed estimate for storm/water/fire damage repairs
I teach contractors how to prepare an estimate using excel workbook templates for a fee. This is much more accurate and clear than Xactimate. Using the critical path approach, the contractor figures all items and steps necessary to rebuild the damaged areas to the pre-loss condition. Insurance estimators leave out numerous items and use square foot and unit costs that are usually below the real costs a legal licensed and insured contractor needs to charge. The insurance adjuster will tell you Xactimate is the national standard for pricing and anything in question is in the unit pricing. Ask any professional contractor if they agree that the national standard for pricing is based on Xactimate and you will emphatically be told no way.
If you want to learn more on how to combat an Xactimate estimate deficient on scope and price contact me.