When the insurer's adjuster sends you a repair estimate after a property loss, most policyholders glance at the bottom line and sign off. That's a mistake. The estimate is a line-item document — and every line is negotiable. Here's how to read it, what to question, and where the gaps typically hide.
What the estimate actually is
The insurer's adjuster estimate is not a contractor bid. It's the insurer's calculation of what they believe it costs to return your property to its pre-loss condition. It's typically built in Xactimate, an industry-standard software that prices repair line items by labor, material, and geography.
The estimate drives the claim payment. If the estimate is low, the payment is low. If items are excluded from the estimate, they're excluded from the payment. Understanding each line item means understanding what you're being paid for — and what you're not.
The structure of an Xactimate estimate
A standard Xactimate estimate organizes line items by room or area, then by trade. You'll see sections for each affected space — kitchen, master bedroom, hallway — with line items for demo, framing, drywall, painting, flooring, and so on.
Each line item has a unit (square foot, linear foot, each), a quantity, a unit price, and an extended price. The unit prices are set by Xactimate's regional pricing database, which updates periodically. The quantities are what the adjuster measured or estimated on-site.
At the bottom of the estimate, you'll see:
- RCV (Replacement Cost Value) — the total estimated repair cost
- Depreciation — withheld amount based on age and condition
- ACV (Actual Cash Value) — RCV minus depreciation: your initial check
- Deductible — subtracted from ACV
- Net Claim — what you actually receive initially
What to look for: scope gaps
Scope gaps are missing line items — damage that exists but isn't in the estimate. These are the most valuable things to find because they represent entire categories of repair that aren't being paid for.
Common scope gaps in fire estimates include:
- Smoke damage in areas not directly burned. Smoke travels far beyond the fire origin. If the adjuster only documented visible burn damage, they may have missed extensive smoke and soot damage in adjacent rooms.
- Structural items behind finished surfaces. Damaged framing, insulation, or subfloor that isn't visible until demolition begins.
- Code-required upgrades. Electrical, plumbing, or structural upgrades required by current building code when reconstruction is permitted. These are often excluded from the base estimate and covered only if you have Ordinance or Law coverage.
- General contractor overhead and profit. On complex jobs requiring a general contractor to coordinate multiple trades, a markup (typically 10% overhead + 10% profit) is standard and often initially excluded.
- Contents damage. Personal property often appears in a separate estimate, or not at all. Make sure all damaged items are accounted for somewhere in the claim.
What to look for: pricing disputes
Even when the right line items are included, the quantities or unit prices may be wrong. Xactimate's regional pricing is a database average — your actual market may be higher, especially during periods of high construction demand.
Common pricing disputes include:
- Understated quantities. The adjuster measured 400 square feet of flooring; your contractor measures 520. The adjuster measured 8-foot ceilings; the actual ceilings are 9 feet. These discrepancies compound across the whole estimate.
- Wrong grade of material. The estimate specifies builder-grade cabinets; your pre-loss kitchen had semi-custom. The estimate specifies 3-tab shingles; your roof had architectural shingles.
- Outdated unit prices. Material and labor costs have risen substantially in recent years. If the estimate uses prices that don't reflect current market rates, the entire estimate can be understated.
How to dispute items
Get a contractor estimate independently. A contractor who has walked the damage — not just read the adjuster's estimate — can identify missing line items and provide current market pricing for the actual scope of work.
Document discrepancies in writing. A formal supplement request — listing specific disputed line items with supporting documentation — is stronger than a verbal complaint. Most policies and state regulations require insurers to respond to supplement requests in writing.
If the gap between the insurer's estimate and contractor bids is large, consider engaging a public adjuster. They're trained in Xactimate and know exactly which arguments move which line items.
Related: What Is Xactimate? The Software That Prices Your Property Insurance Claim — how the estimating software works and where the arguments live.