When the insurer's adjuster hands you an estimate, and when a public adjuster counters with their own, both documents were almost certainly produced in the same software: Xactimate. Understanding how that software works — and where it can be argued — is essential to understanding why two professionals can look at the same damage and produce estimates that differ by tens of thousands of dollars.
What Xactimate is
Xactimate is estimating software developed by Verisk (formerly Xactware) and used by virtually every property insurance carrier, public adjuster, and independent adjuster in North America. It's the industry standard for building repair estimates in property claims.
The software maintains a database of material and labor costs — broken down by trade, geographic market, and time period. When an adjuster builds an estimate, they select line items from that database and assign quantities. Xactimate calculates the extended price based on the regional unit costs in its database.
Because both sides use the same software and the same price database, the estimate debates are largely about three things: which line items belong in the estimate, what quantities are correct, and which price level to use.
How Xactimate prices work
Xactimate prices are set at the local market level — Georgia pricing differs from Texas pricing, and Atlanta-area pricing may differ from rural Georgia pricing. The database updates on a monthly or quarterly basis to reflect material and labor market changes.
Prices in Xactimate represent the average cost in that market. In periods of high construction demand — after a major storm event, during supply chain disruptions — actual contractor prices can exceed the Xactimate database. When that happens, adjusters and public adjusters can use a "non-standard pricing" or override function to argue for above- database pricing with supporting documentation.
This is one of the most common gaps in post-disaster estimates. If you're filing a claim after a major weather event — a hailstorm that affected your entire region, for example — contractor prices are probably elevated above Xactimate's current database. That difference matters.
The line item argument
The most common area of dispute isn't unit prices — it's scope. Which line items belong in the estimate at all.
Xactimate has thousands of line items covering every conceivable repair operation. An experienced estimator chooses which items apply to a given loss. An insurer's adjuster may include a basic set of items; a public adjuster reviewing the same property may identify additional items that were omitted.
Common examples:
- General contractor overhead and profit (O&P). When a repair requires multiple subcontractors coordinated by a general contractor, an O&P markup (typically 20% of the estimate) is standard in the industry — but insurers sometimes exclude it from the initial estimate. This is frequently the largest supplemental item.
- Debris removal. Demo costs aren't always included. For fire claims, removing damaged material before reconstruction can be a substantial line item.
- Permit costs. Reconstruction permits are a real cost that belongs in the estimate.
- Specialty items. Custom work, specialty materials, or unusual conditions that don't fit standard Xactimate line items require documentation and sometimes require manual pricing.
Price level selection
Xactimate estimates can be generated at different "price levels" — typically labeled as Level 1 through 4, representing different positions in the price range for a given market. Insurers typically default to lower price levels. Public adjusters argue for higher price levels when market conditions support it.
This is one of the technical arguments that requires Xactimate knowledge to make effectively. Knowing what price level to use and how to justify it with documentation is part of what separates a strong supplemental negotiation from a weak one.
What this means for your claim
If the insurer's estimate seems low, the starting point is understanding why. Is it scope (missing line items), quantities (measured wrong), or pricing (below market)? Each has a different remedy and requires different documentation.
Getting a contractor estimate from someone who has physically walked the damage — and who will provide line-item pricing that can be compared against the Xactimate estimate — is the first step. If there's a significant gap, that gap tells you where the disputes are.
For a major fire or smoke damage claim in Georgia, the stakes of the Xactimate argument can easily be $20,000 to $50,000. It's worth understanding.
Related: How to Read an Insurance Adjuster's Estimate (And What to Dispute) — a practical guide to reviewing your insurer's Xactimate output.