Top Xactimate Mistakes That Reduce Claim Value that lower claim values are among the most common reasons why property insurance claims end up being undervalued. A minor mistake in a Xactimate estimate like omission of some line items, inaccurate measurements, out-of-date pricing information, and incomplete scope of work could make a huge difference to the final insurance claim. Awareness of such Xactimate mistakes will help the public adjusters, contractors, and restorers generate accurate insurance estimates.
One of the most significant causes that insurance claims get underpaid is the lack of necessary items in the estimate. All damaged components, labor costs, and materials needed should be included correctly in the estimate.
Items such as detach and reset, debris removal, flashing, underlayment, painting prep, or moisture barrier can substantially reduce the total settlement, this is one of the top Xactimate Mistakes That Reduce Claim Value.
Why it matters: An incomplete estimate results in an incorrect valuation of the insurance claim and problems while adding supplements.
Incorrect measurement units is another type of Xactimate estimate mistake. It includes mistakes like inputting LF instead of SF or an incorrect dimension in the sketch.
Measurement errors influence estimates on roofs, floors, drywall, paint, or mitigation estimates.
Best practice: Proper Xactimate sketching and quantities calculation is critical for correct insurance estimates.
Xactimate pricing lists are updated regularly based on regional labor and material costs. You can learn more about Xactimate from the official Verisk Xactimate website. Use of an obsolete pricing list will mean that estimates will not take into account the prevailing market situation.
This problem was especially prevalent during inflationary and disruptive times when construction costs skyrocketed in the US, this is one of the top Xactimate Mistakes That Reduce Claim Value.
Significance of the problem: Use of outdated prices means smaller settlement payments and higher likelihood of claim disputes between the insured party and their insurance carrier.
Inadequately defined scope of work is among the most ignored problems in insurance estimating. Lack of completeness in the scope of work results in failure to address all the damages to be covered, code upgrades and secondary repairs required for proper restoration of the property.
Examples of inadequate scope include water damage claims that ignore insulation replacement, mold removal and wall cavity drying. Roofing claims that do not address starter rows, ridge caps, and ice and water shield.
Best practice: Properly developed scope of work enhances claim accuracy and helps with submitting supplements from public adjusters.
Contractor overhead and profit (O&P) are frequently omitted from insurance estimates, despite multiple trades being utilized. Such an oversight can dramatically lower claim value.
Where multiple trades such as roofers, dry wallers, painters, floorers, electricians or plumbers are involved in complex restoration projects, overhead and profit become necessary.
Reasons for its importance: The inclusion of O&P will greatly contribute to increasing the amount of money insured people get through insurance claims.
Currently, many public adjusting companies use the service of remote Xactimate estimators in order to enhance estimation.
An expert remote Xactimate estimator can:
1. Add missing line items
2. Fix price issues
3. Enhance estimate structure
4. Review insurance company estimates
5. Make supplement estimates
6. Assist public adjusters in negotiating claims
Modern claim management software applications will assist public adjusters in managing documentation, revisions, and claim workflow in a much more efficient way.
The software increases the efficiency in:
1. Managing insurance claim process
2. Managing communications
3. Organizing files
4. Managing revisions
5. Claim workflow efficiency
Effective claim management leads to less delay and assists in fast insurance claim settlements.
Implications of Making Mistakes when Using Xactimate for Insurance Estimating
1. Paying out low amounts for the insurance claim
2. Increasing the timeline of settlement
3. Increase in claim disputes
4. Denial of supplement
5. Dissatisfied clients
In case of public adjusters, accurate estimates directly affect their success rates and their client’s satisfaction.
Xactimate is an excellent tool for estimating in insurance industry; however, for getting accurate estimates it is necessary to use the tool correctly, develop a thorough scope and maintain good documentation practices.
Avoiding mistakes with Xactimate estimating software allows the public adjuster to prepare more accurate estimates and supplement requests.
NEOMIND helps public adjusters across the United States with expert Xactimate estimating services, supplement support, Lead Generation and Lead Management, back-office operations, and insurance claim management solutions designed to improve efficiency and business growth.
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