Xactimate is the software most insurance adjusters use to write property damage estimates. Understanding how it works — even at a basic level — makes you a significantly more effective supplement negotiator. You don't need to use Xactimate to benefit from knowing how it prices jobs.
What Xactimate Is
Xactimate, made by Verisk (formerly Xactware), is the industry-standard estimating platform used by most major insurance carriers in North America. It maintains a database of material and labor prices — updated quarterly — for hundreds of construction line items, organized by zip code.
When an adjuster inspects a property, they build the estimate inside Xactimate by selecting line items from this database. The software calculates quantities, applies pricing, and generates a PDF estimate that becomes the basis for the insurance payment.
Most large carriers (State Farm, Allstate, USAA, Travelers, Nationwide, and others) use Xactimate. Some carriers use competing platforms (like Symbility or CoreLogic's Sketch), but Xactimate has the largest share.
How Xactimate Prices Are Organized
Each line item in Xactimate has a category code, a description, a unit of measure, and a price per unit. Prices are broken down into:
- Material: The cost of the physical material
- Labor: The labor to install it
- Equipment: Any equipment costs associated with the line item
As a roofing contractor, the most important line items to know are in the RFG (Roofing) category. Common line item codes you'll encounter:
- RFG 3TAB — 3-tab asphalt shingles (per square)
- RFG ARCH — Architectural/dimensional shingles (per square)
- RFG ARCHPREM — Premium architectural shingles
- RFG ICE — Ice and water barrier (per square foot)
- RFG FELT15 / RFG FELT30 — 15 or 30 lb felt underlayment
- RFG SYNTH — Synthetic underlayment
- RFG STA — Starter strip
- RFG EDGE — Drip edge
- RFG RDGCAP — Ridge cap
- RFG RIVENT — Ridge vent
- RFG PBOT — Pipe boot (plumbing vent flashing)
- RFG TEAR — Tear-off of existing roofing
Why Xactimate Prices Are Often Below Market
Xactimate prices are regional averages derived from contractor bid data. Several factors cause them to lag real-world costs:
- Update lag: Prices update quarterly, but material costs can spike within weeks of a major storm event. A storm in spring may create material shortages before the July price update reflects them.
- Regional averaging: Prices average across wide geographic areas. If you're in a high-cost urban market, regional averages often underrepresent your real labor costs.
- Labor assumptions: Xactimate labor rates assume a specific production rate. If the job requires more time (steep pitch, complex design, debris removal, etc.), the per-unit rate doesn't capture the real cost.
This is one of the most legitimate — and most commonly successful — supplement arguments. If your actual material invoices exceed Xactimate's priced material cost, you can supplement for the difference with documentation.
Reading an Xactimate Estimate
When an adjuster sends you the Xactimate scope, you're looking for three things:
- Missing line items: Scan the RFG section for items that should be there but aren't (starter strip, drip edge, ice barrier, pipe boots, ridge cap, ventilation, flashing). Anything you'll do that isn't listed is a supplement candidate.
- Quantities: Compare measured squares to your own measurement. Check linear footage for items like drip edge, ridge, and valley. Desk adjusters frequently use satellite measurements that miss penetrations or miscalculate complex roof sections.
- Missing categories: Check if O&P is listed. Check if permit fees are included. Check for any code upgrade line items that should appear based on local requirements.
Xactimate Levels (Pricing Databases)
You may encounter the terms Level 1 and Level 2 in Xactimate pricing disputes. Level 1 is the standard pricing database. Level 2 exists for disaster conditions (post-storm surge pricing). When there's a major storm event, the Xactimate Level 2 database sometimes allows higher prices to reflect demand-driven cost increases. Some contractors successfully request Level 2 pricing after catastrophic events.
Do You Need to Use Xactimate Yourself?
Not necessarily. There are three approaches:
- Write supplements in Xactimate: Gives you line-item precision and speaks the adjuster's language directly. Some supplements are more likely to be approved when the request is formatted in Xactimate. The software is licensed by Verisk and has a monthly cost.
- Write supplements using your own estimate: Build your estimate in your CRM or estimating tool, compare line-by-line to the Xactimate scope, and submit the difference as a supplement. Works well for experienced contractors who know the common gaps.
- Use a supplement service: Third-party supplement companies will write and submit supplements for you, typically for a percentage (15-25%) of what they recover. Higher cost but requires less internal expertise.
Most mid-size insurance restoration contractors land somewhere between options 2 and 3: they handle common supplements in-house (O&P, starter strip, drip edge, pipe boots) and use a service for complex multi-trade claims.
The Bottom Line
You don't need to be an Xactimate expert to supplement effectively. But knowing the line item codes, understanding how pricing works, and being able to read a scope and identify the gaps gives you a meaningful advantage in every adjuster conversation. The adjuster speaks Xactimate — knowing even the basics of that language makes you a stronger negotiator.
Further Reading
- Roofing Insurance Supplements: The Complete Contractor's Guide — Full supplement workflow, tracking, and follow-up cadence
- Insurance Supplement Items Adjusters Miss — The line items to look for in every Xactimate scope you receive
- How to Write a Roofing Supplement Letter — Template for submitting supplement requests after you've identified the gaps