Xactimate is a standard estimating system used by insurance companies and contractors to financially settle insurance claims. I’ll try my best to break it down in layman’s terms:
Reasons for a Standard Estimating System
An insurance company’s job is to provide their customers fair compensation when something unexpected happens, in our case water damage. The customer chooses a contractor to complete the work and then the insurance company pays that contractor directly for their services. The problem is that there are literally hundreds of contractors performing the same service in any given area. (restoration, roofing, plumbing, ect.) Imagine the variation in pricing if each contractor had their own system for billing the insurance company. It would be very difficult for insurance adjusters (see link) to determine what was fair or fraud. Kind of like the wild wild west of estimating.
XACTIMATE allows Insurance and Contractor to Agree on Price
To combat this problem all major insurance companies have implemented Xactimate as their estimating and billing system. As a result, all legitimate contractors, who want to get paid for their services, have also adopted this system. I suppose if an illegitimate contractor doesn’t care about getting paid they can still just wing it. (Note: Don’t hire illegitimate contractors to work on your house.)
The way it works is Xactimate uses exact “items” (measurements, time, material, and labor) to come up with prices insurance companies and contractors can agree on. For example: Xactimate pays $0.41 per foot to “tear out baseboard.” If a contractor tears out 213 feet of baseboard on a job, Xactimate would compensate them $87.33. ($0.41 x 213 feet = $87.33) Insurance company agrees, contractor agrees. Life’s gravy.
That’s just one example of literally thousands of different “items” contractors can choose from to develop detailed estimates insurance companies can agree to. Think of it as adding a sheriff to that wild wild west town of estimating.
Xactimate creates pricing uniformity between the insurance company and contractors that previously didn’t exist. It helps make the insurance claims process go smoother, which creates a better overall experience for you the customer.
If you would like to read more about Xactimate and the company that created the software follow the link below.
NEED HELP WITH WATER DAMAGE? CALL (317) 315-5071