Xactimate Market Manipulation. Big Boy question

#1

Scenario

2 markets I’ve been working (done over 1,000 jobs in each, about 90 minute drive between them) for the last few years got wacked in May.

Historically market A has been lower than most others in the state on Xactimate.

When the storm hit Xactimate pricing for each was as follows.

Market A
rfg 220 --140
rfg 240 --146
rfg 300 – 159
tear off 32

Market B
rfg 220 – 144
rfg 240 – 156
rfg 300 – 169
tear off – 35

In June the difference per square was $6-12 depending on the material. The storm actually hit more homes in market A.
Market B seems to have more contractors presumably because the out of towners wanted that extra $6-12.

Tonight I downloaded the new prices and don’t know what to say, market A, with more damage is basically the same and market B, with a pair of national players in town, has jumped a load.

Market A
rfg 220 --140
rfg 240 --146
rfg 300 – 160
tear off 32

Market B
rfg 220 – 154
rfg 240 – 164
rfg 300 – 182
tear off – 44

Material houses have gone up on counter prices for shingles in both markets, im still on my yearly contract price so it hasn’t affected me but how in the heck did it all of a sudden start paying $9 more a square to dump in market B? The dump hasn’t changed prices, same as always.

I’ve been told that there is some way to manipulate market labor pricing in the feedback section of Xactimate but idk if its true or how to even do it.

Market B has Aspen in town and market A doesn’t. The last time I worked in a market with Aspen the same thing happened to Xactimate, I was small then but it was great to ride their coat tails.

I need to know what to do to find the missing $34 a square in market A. I have sales reps and advertising money invested heavily in both markets and we are rocking in both spots, Market A has more work that will last longer than Market B but something has to give, $34 a square is a lot of dough.

#2

I guess this is why low markets stay low

#3

Why not make market B price points your own in market A - and show the adjuster that you can be 27-33% (or whatever) above the average listed pricing - in markets all over the U.S.

xactimate-texas-contractors-fair-prices-can-be-27-higher-t15227.html

#4

Because too much goes wrong from point a to point b. I have a dozen reps in both spots, if I was a one man band it would be a little easier to make sure that the deals were closed right properly to ensure everything went the right way but I’m not.

It’s a volume operation and it’s hard enough to keep them on path doing their current job. Before you lecture me on training them more, I’m in the business of training salespeople for my business and not training new contractors to run their own.

  1. I’m relying on a sales rep to meet adjusters, most times they are happy to get an approval.

Field adjusters want to do what they want to do 100% of the time and have no interest in feeling like anyone but them know what’s going on because they have the big swinging check book between their legs.

If you challenge their authority they will damage your reputation with the home owner before they even have a scope in hand. If you dispute their price the customer will get told to shop around regardless of how solid your contingency is or how well you closed the job. “I have 15 contractors that would come do this roof for this today” is my all time favorite.

  1. The customer thinks their insurance company is out to do them right, after all they spend BILLIONS on TV ads to convince everyone of this. They have been dealing with their agent for years and haven’t had a bad experience yet or they would have a new agent already. They see the adjuster as an extension of the agent and think they are all in some kind of family in which everyone has their best interest at heart.

When you tell them that there is 30-50% of the claim missing but they have already had 9 other guys knock on their door and offer to eat an upgrade and deductible and mow their grass for a year and give them a new golf driver they start thinking it’s better to just call that guy instead of the guy trying to “scam” their insurance company.

  1. The sales guys, my guys are all 10 off the top. If some of the claims routinely go up 50% and some don’t it won’t be long until they have problems with their pay but if the scopes just came out of the printer decently then there would be no problems.

There’s probably about. A dozen more points I could make about why it’s easier to just start with a better Xactimate price but it’s late and it’s Sunday.

I just need to figure out how to get the base prices up.

#5

You should get the insurance companies to pay for your marketing! Because if you are doing the work for what the field adjusters are initially paying and doing a lot of volume you are saving them TONS of money. I don’t mean that in a negative way but you seem to be a big enough player to really make a difference and really make ALOT more money for your company.

If our salespeople can’t get the homeowner on our side or the homeowner wants free upgrade and deductible covered we walk away. We are now working less but making more money. We are doing jobs for sometimes twice as much as our competitors but our customers never feel like they were ripped off in the least. By us doing less volume but charging a premium we have more time to concentrate on each and every job. We are providing our customers with a better service than our competition who is charging much less. And we get referrals left and right by doing this.

I understand different companies have different business models but although we compete we all need to work together in helping everyone get good margins. And stop giving away everything and stop the majority perception that a customer should never have to pay anything out of pocket.

Let’s reduce the “list” of contractors who will do work for less than nothing. The following is the best description of the insurance restoration industry I can think of. “mostly roofing”

What team always wins a football game? The team that cooperates, communicates, and gets along with their teammates. All insurance carriers are on one side of the ball and all contractors are on the other. And the insurance companies are kicking our a$$. They compete for new policy holders but on the claims side they share files on each and every company. And they know what xyz roofing will settle for or they know that ABC contracting will push the envelope and get an attorney involved with the insured if they don’t get GCO&P on every roof only. And we need to help each other make our jobs more profitable. So the insurance companies’ “list of contractors” becomes shorter and shorter. Once your file has a reputation of never taking no for an answer. You will begin to see supplements get approved without you getting a call from a desk adjuster.

Every year the insurance companies are finding tactics to help them save 100s of millions of dollars. They then share that info with competing insurance companies to make their industry more profitable.

Everything is working EXACTLY how they want it. 1) The storm restoration industry as a whole doesn’t really have a good reputation. 2) They have many insureds thinking that the initial insurance payment is ALL they are gonna pay. 3) They want us running around like trick or treaters cutting each others throat on pricing and throwing each other under the bus because its the insurance companies who are saving money when we are giving the best “deal” to the homeowner.

Every year the insurance companies are finding ways to save tons of money on claim payouts. It’s becoming more common for insurance companies switching from RCV to ACV on roof only. And it seems that if one insurance company saves money and gets away with it the other follow suit. I’ve also heard of Allstate not paying for cosmetic damage on gutters. Insurance companies share information with their competitors to make their industry more profitable. What have us as contractors shared this year to make our industry as a whole more profitable??

I think one of the biggest reasons this industry has a bad name is contractors hiring any warm body to try to sell jobs! A salesperson can make a company a lot of money or they can lose a company ALOT of money. And an uneducated/ undertrained sales rep can cause many headaches and many expenses that could be avoided.

This isn’t a negative response/remark to the original poster. But I’m just seeing where this industry is headed and we need to share information/tactics that can help our businesses be more profitable and weed out the bad apples that keep this profession in the negative spotlight because I enjoy what I do and plan to do it for many more years.

#6

[quote=“roofnrun”]
What team always wins a football game? The team that cooperates, communicates, and gets along with their teammates. All insurance carriers are on one side of the ball and all contractors are on the other. And the insurance companies are kicking our a$$. They compete for new policy holders but on the claims side they share files on each and every company. And they know what xyz roofing will settle for or they know that ABC contracting will push the envelope and get an attorney involved with the insured if they don’t get GCO&P on every roof only. And we need to help each other make our jobs more profitable. So the insurance companies’ “list of contractors” becomes shorter and shorter. Once your file has a reputation of never taking no for an answer. You will begin to see supplements get approved without you getting a call from a desk adjuster.[/quote]

RnR, I’m not sure it’s quite as organized as that, but you are on the right track!
Xactimate is owned by ISO, which is owned by Verisk Analytics, which until a few years ago was a privately held company owned entirely by the worlds largest insurers. Today it is public (it had that years largest IPO when it went public) but is still run by a who’s who of former insurance and finance executives.
Consequently, Xactimate as a whole is low in terms of pricing, unless you know it intimately and can input ALL of the different correct items into the estimate to create an accurate cost of the work. Even then, it can be low!
My guess is that in market “A” there are a number of roofers with low costs (no insurance, office at home, etc) and they skew the numbers down when polled by Xactimate.
One of my peeves with Xactimate is that they don’t seem to qualify contractors before they poll them. In my opinion, an uninsured roofer is not qualified, and to establish pricing based on feedback from an unqualified contractor economically “forces” insureds to use those unqualified contractors or face potential out of pocket expenses.

#7

8 companies in my market that I know of communicated regarding pricing with xactware last month. the new price list went up 10 cents. a hell of a scam they are running there.

#8

[quote=“Sentry”]
Xactimate is owned by ISO, which is owned by Verisk Analytics, which until a few years ago was a privately held company owned entirely by the worlds largest insurers. Today it is public (it had that years largest IPO when it went public) but is still run by a who’s who of former insurance and finance executives.
Consequently, Xactimate as a whole is low in terms of pricing, unless you know it intimately and can input ALL of the different correct items into the estimate to create an accurate cost of the work. Even then, it can be low!
My guess is that in market “A” there are a number of roofers with low costs (no insurance, office at home, etc) and they skew the numbers down when polled by Xactimate.
One of my peeves with Xactimate is that they don’t seem to qualify contractors before they poll them. In my opinion, an uninsured roofer is not qualified, and to establish pricing based on feedback from an unqualified contractor economically “forces” insureds to use those unqualified contractors or face potential out of pocket expenses.[/quote]

Don’t forget about Verisk’s other big purchase from earlier this year. They now own EagleView (as well as Pictometry, since they merged with EV before the acquisition).

Measurements & pricing provided by the same person cutting the check. Isn’t that pretty much the same thing as letting the homeowner estimate their own roof?

#9

Big boy answer: You guys know that a fair Contractor, that is hired by a insured client, is the actual business model that honest insurance adjusters will honestly adjust to. Any seasoned adjuster knows that Xactimate “pricing” is nothing more than a conglomeration of averaged cost points of various business models in a given region/zip code. Xactimate, and it’s (theoretical) usability, is really just a cost estimation management tool based on, (supposed), averaged regional costs, and nothing more. It is NOT the end all of what insurers owe for, and it is NOT the construction industry standard for cost estimation. Coupled with 360Value - It is dumbed down “copy and paste” data for adjusters/insurers to point to to claim they pay what they owe.

By review - It is a over hyped and pretty lousy way to run a business if ones depend on Xactimate data only to run a business. Additionally, the data is misused or underutilized by insurers and adjusters in order to control (360 Value) profit margins for insurers, and insurers accountants, for a anticipated profit range per quarter. Any contractor that bends to the grand and spurious illusion that insurance adjusters only determine by Xactimate what they should charge for per their market, is in need of an authentically hard reality check.

Mature and fair Contractors uniquely, and financially, determine their own market costs, as agreed to with their clients - NOT silly and deluded insurance “adjusters” using Xactimate, or any other construction cost estimation program, and their rigged and fixed “pricing”. That natural market dynamic keeps markets truly fair, and truly reasonable.

#10

Answer/Solution = Market C (correct) pricing at real, true and accurate (RTA) pro contractor pricing rather than XM8’s typically lowball and always laughable “survey” rates.

#11

[quote=“RoofSnap Software”]
Don’t forget about Verisk’s other big purchase from earlier this year. They now own EagleView (as well as Pictometry, since they merged with EV before the acquisition).

Measurements & pricing provided by the same person cutting the check. Isn’t that pretty much the same thing as letting the homeowner estimate their own roof?[/quote]

Just FYI, The merger/acquisition for EagleView by Verisk fell though. The FTC shut it down. Still, EagleView is by far the largest provider of measurements to the insurance industry. You still, regardless of the state of the acquisition, will be more likely to run into EV measurements over any potential competitors in the field.

Just thought I would clarify… ( I used to work for them years ago, and I just got back from the IRE where I talked with them at length. )

#12

You can send your pricing and feedback to Xactware. I’ve seen storm damaged areas go up 20% in pricing towards the end of a storm due to feedback being sent. I own an estimating company and know that by keeping a close on pricing, that you will notice certain things being way too low. Interesting conversation.

#13

Many Construction Business Owners that pursue insurance related projects, have eventually come around to finding an alternative solution to Xactimate. It is reported that when they did, they had less resistance from adjusters to cheat them, or their insured client. When you stop using insurers pseudo-construction market tools/data that insurers and adjusters can misinterpret and misapply, you can have less problems with project and cash flow.

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