Anyone who is familiar with insurance claims or insurance restoration, has undoubtedly heard of or interacted with Xactimate. While other estimating software exists, Xactimate has firmly situated itself as the go-to application for determining the scope and price associated with a claim as well as setting the parameters for work to be done. Xactimate has long been used as a medium for insurance adjusters, public adjusters, contractors and attorneys to get on the same page regarding a loss. In short, Xactimate is an estimating tool that allows stakeholders on a claim to quantify construction costs without going through the laborious process of securing multiple real-world bids, as the software aims to provide labor and material price averages based on date and location, which are updated monthly. While this does provide a level of convenience and consistency when dealing with an insurance claim, it can pose issues if the software is not used correctly.
The Birth Of Xactimate
Xactimate, a product of Xactware Solutions Inc., was created 1986 by Jim Loveland, recognizing the need for a more efficient way to estimate repair and remodeling costs in the aftermath of large-scale disasters. Equipped with significant knowledge of the insurance and restoration construction industries, Loveland set out to create a tool that would streamline the estimating process, easily frame and define disputes, and improve the overall efficiency of property claims.
A Brief History Of Xactimate’s Rise To Prominence
1986:
Xactimate is released as a desktop application that runs on early Macintosh computers. Its robust database of construction and repair costs immediately gain popularity in the insurance and restoration Industries.
1995:
Xactimate 4.0 is released, constituting a significant advancement on its predecessors with enhanced features and a broader range of cost data.
2002:
Xactimate Online is offered, featuring web-based functionality and remote access to the software, creating a more convenient and expedient experience for users.
2006:
The Sketch feature is introduced, significantly advancing the estimation process by allowing users to create accurate and detailed diagrams and floor plans within the software, and even on site.
2013:
Xactimate creates and provides integration with XactAnalysis, allowing for increased data sharing between insurance carriers, contractors, and adjusters, improving collaboration and ideally speeding up claims processing.
2020:
Xactimate Mobile is launched, enabling the use of mobile devices such as smartphones and tablets to create precise estimates while in the field.
Most Common Applications
While used primarily within the context of property insurance claims, Xactimate software has found a variety of applications across multiple industries:
Insurance Claims:
Xactimate simplifies the claims process for insurers, adjusters, policyholders, and contractors allowing all parties to be on the same page, ensuring accurate scoping of losses, and increasing the likelihood of expedient resolution of property claims.
Restoration Construction:
Restoration contractors nationwide rely on Xactimate to furnish detailed estimates, manage restoration projects, and communicate effectively with clients and insurers. Xactimate allows restoration contractors to provide an apples-to-apples format estimate to insurers when working with them to come to an agreement on the scope of work associated with a claim.
Real Estate:
Xactimate can assist in assessing property values, estimating repair costs, and providing useful data for real estate transactions. The software has emerged as a helpful tool for home inspectors and realtors when executing a home sales transaction.
Government Entities:
Municipalities and government agencies use Xactimate for their officials during disaster recovery, setting reserves for capital expenditure projects, infrastructure projects, and sometimes for budgeting.
Litigation:
Xactimate’s clear and easy-to-read estimates serve as valuable evidence in legal disputes, often providing a clearly defined basis for dispute, and ensuring fair settlements.
Issues And Difficulties
While Xactimate has proven to be a useful tool in the negotiation and resolution of property claims, it is not without its faults. Some of the most common complaints users have voiced about the software are;
User Cost:
With high subscriptions costs, some small businesses find it difficult to justify the price. This is especially true for companies who do not work primarily in the insurance restoration industry.
Perceived Biases:
One common complaint about Xactimate is its bias toward insurance carriers. As Xactimate aims to offer a market specific average for material and labor prices, many contractors and insureds contend that carriers effectively use the median cost as the maximum and work down from there. This issue is reinforced by the fact that far more carrier representatives are users of Xactimate, and are providing feedback to Xactware. This in turn influences program defaults for the program, which will then favor carrier preferences on use of the software. One good example of this is the default to DMO trade labor for removal in Xactimate, regardless of the trade being considered. Additionally, critics argue that cost data and pricing sourced and employed by software has the propensity to be skewed towards larger construction companies, potentially leading to inaccuracies in estimates for smaller or more geographically unique markets. Users in areas with higher construction costs may find that the default prices in the software underestimate the actual expenses. These biases often constitute the core disputes between stakeholders when attempting to gain consensus on replacement cost value within the context of an insurance claim.
Material Cost Inaccuracies:
Certain materials within Xactimate are consistently inaccurately represented due to their more specialized nature. HVAC, windows, and paint are among the most commonly cited as the trades that lack accuracy within the software. Additionally, labor associated with these items, as well as other specialty items are often not-well represented in Xactimate. In these situations, the best course of action is to acquire a real-world contractor bid and place within the insurance estimate.
Ultimately, it is imperative for users of Xactimate to be critical of their specific situation relying on the software for estimation of a job. Exercising caution, cross-referencing data with local market conditions, and consulting with experts when necessary will ensure fair and accurate assessments in their specific contexts.
