Why Do Some Adjusters Give Low Prices on Estimates and How You Can Counter Them
Why Do Some Insurance Estimates Seem To Be Priced Too Low?
Imagine walking into a restaurant and ordering a full steak dinner, but when the waiter brings your plate, all you get is a side salad. Confused, you ask where the rest of your meal is, and the waiter shrugs, saying, "Well, this is what our pricing guide says you should get."
Dealing with some insurance estimates can sometimes feel like that. You expect to be fairly compensated for the full scope of work, but instead, you’re handed an estimate that seems to be way off and does not even cover essential costs. It’s frustrating, but here’s the good news - you don’t have to accept it as-is.
Understanding how insurance estimates are calculated is the first step to successfully negotiating fair payouts and maximizing profits. In this blog, we’ll break down six common reasons why estimates come in lower than expected - and, more importantly, what you can do about it.
1. Different Technology: Xactimate vs. Symbility
Insurance adjusters mainly use two different estimating software – Xactimate or Symbility. However, these platforms have very different pricing methodology, and they are not always in sync with real-world pricing. The same job can get priced very differently, we are talking typically 20% to 30% differences, depending on which software is used.
What can Claim Supplement Pro do:
We can help you identify which software is used for the estimate.
Create a supplement estimate to include any missing or incorrect line items to submit to insurance.
Show real-world pricing discrepancies with material and labor invoices.
2. Different Sources for Pricing: ITEL and discount warehouses
For shingles or some other specific line items, insurance companies might instead use alternate pricing sources instead of Xactimate or Symbility. You may sometimes see prices sourced from ITEL or a discount warehouse.
The problem? ITEL seems to be providing insurance with the lowest price it can source nationally, but the estimate is not transparent where or how exactly they are getting the listed price. ITEL also does not sell materials. They test them. So, that creates confusion as well since the insurance estimates citing ITEL pricing are not saying where materials can be purchased for the low price that insurance has on their estimate. Some insurances also use discount warehouse pricing, which might work if for someone doing DIY repairs on a tight budget. But neither ITEL or discount warehouse pricing presents a fair market price. The prices can be significantly lower than the actual material suppliers’ prices that contractors use to buy materials – in the regional area where the property is located.
What can Claim Supplement Pro do:
Journalists have a funny mantra that applies here: “If your mother says she loves you, check your source.” We can check and verify any and all information, and document when a pricing source is incorrect.
Submit your actual material supplier invoices to prove your actual costs.
Review the estimate line by line to make sure the correct line items are being used for correct pricing, and not inferior alternate line items.
3. Outdated Price Lists
Insurance estimating software updates its pricing monthly. But prices in the market can sometimes change drastically between when an inspection happens and initial estimate is made, and when the work is ultimately completed. If there are major disputes with an estimate, such as a large amount of missed damage, that can take months to resolve with insurance. By the time you get to agreement and are ready to proceed with repairs and order materials, you could be dealing with an estimate that is now stuck in last year’s economy.
What can Claim Supplement Pro do:
Review pricing changes to see if there have been big changes, and if so, request that current pricing be used for your area.
4. Adjuster Missed Damage or Code Upgrades
Adjusters aren’t roofers or contractors, and sometimes they miss crucial damage or are unfamiliar with the building code requirements for a specific area, which increase repair costs. If there are mistakes or oversights on the insurance estimate, without careful review and supplementing, you could go into a project unprepared and would have significant costs pop up later, that would be a hit to you, when you agree to do a job for an insurance estimate amount that is not adequately paying for all of the actual repair costs.
What can Claim Supplement Pro do:
Submit documentation of missed damage.
Request a reinspection if major damage was missed.
Reference local building codes and explain work that is required to be done.
Make an estimate for the full extent of the damage and repairs from your own inspection, and submit to insurance for review.
5. Incorrect Line Items
Adjusters might accidentally use incorrect line items or quantities leading to lower payouts. For example, they might list 25-year shingles instead of 30-year shingles, make a mistake typing in the quantity of squares for the roof or other lines, exclude special or extra labor costs that are not directly covered in line items, or fail to add items that are pre-existing on the roof or are code upgrades.
What can Claim Supplement Pro do:
Review the entire estimate line by line.
Create and submit an estimate with the correct line items.
Communicate with the adjuster to go over the differences between their estimate and our estimate.
6. Xactimate & Symbility Sometimes Lack Enough Data for Certain Items
Not everything fits neatly into Xactimate or Symbility’s pricing system. Less commonly used materials, highly skilled custom labor, and regional costs might be underestimated or missing from their systems altogether. If the software doesn’t have enough data or an option for the correct line item, you could be looking at a lowball estimate that doesn’t reflect the true cost of the work.
What can Claim Supplement Pro do:
Provide manufacturer pricing sheets and vendor invoices as proof of actual costs.
Submit a subcontractor’s bid outlining real costs.
Request a manual price adjustment for items that aren’t in the system.
Conclusion
Low insurance estimates can be a headache, but they’re not set in stone. With the right approach, and having Claim Supplement Pro as your supplementing partner, you can challenge low estimates and ensure you’re getting compensated fairly for your repair work.
You can be assured that CSP will routinely do the following:
- Review insurance estimates thoroughly and carefully
- Create and submit our estimates with corrections and supplements
- Negotiate changes professionally with the insurance adjuster
At Claim Supplement Pro, we know how frustrating it is to battle low insurance estimates. But you don’t have to fight alone. Our team of experts specializes in navigating insurance claims, creating accurate and thorough estimates, and professionally negotiating for every dollar you deserve.
Don’t assume initial estimates are accurate. Let us handle the review and back-and-forth with insurance so you can focus on what you do best - restoring homes and growing your business.
Schedule a free consultation today, and let’s turn that lowball estimate into a fair payout!