How do you read a carrier's Xactimate estimate?
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Read an Xactimate estimate from the top: price list, line items, overhead and profit, tax, then the recap that runs from replacement cost to the amount payable. Differences between estimates usually come down to four things: the price list, the line items, overhead and profit, and depreciation.
Not legal advice. This article is general information, not legal advice. Estimating practice, policy terms and state rules vary. Check the policy and the current statute, or talk to a licensed attorney, before relying on anything here. A public adjuster may not give legal advice under s. 626.854(3). Last reviewed November 4, 2026.
What is on the first page of an Xactimate estimate?
The first page has general information: estimate type, insured name, property address, date, claim number and the price list. Confirm each against your file. Even a small error here is worth noting, because it can cause mix-ups later.
Look hardest at the price list. It sets the unit price for every line that follows.
What does the price list code mean?
A price list code names the region, the Xactimate version and the month and year of the pricing. For example, OHCO8X_APR24 means Columbus, Ohio, version 8X, April 2024. Verisk, which owns Xactimate, says it publishes monthly pricing data for more than 460 geographic regions.
Ask three questions. Does the region match the loss location? Does the month fit the timing of the repairs? Was the list current when the estimate was written? Because the price list sets every unit price, a different list can change every line.
How do you read the line items?
Each line is one task, material or service with a quantity, a unit price and a total. Units are abbreviated: SF for square feet, LF for linear feet, HR for hours, EA for each, and so on. Each price list item contains labor, material and equipment.
Walk the lines room by room against your own scope. Look for quantities that differ from your measurements, items that are missing, and lines that describe a different grade of material than the one damaged. A missing line is the easiest difference to overlook, because nothing on the page points to it.
- Quantities: do the measurements match your sketch or photos?
- Missing scope: is there a line for every damaged item and every step to repair it, such as tear-out, drying, paint, trim and cleanup?
- Grade and type: does the line describe the material that was actually damaged?
- Tax and permits: are they present, and do they make sense for your state?
What are overhead and profit, and why do they matter?
Overhead and profit, usually written O&P, is the overhead and profit a general contractor charges, applied as a percentage. Because it is a percentage of the scope, the amount can be significant. Whether it is included depends on the policy, the carrier's guidelines and state rules.
Search the PDF for O&P and note whether it appears. If it does not, ask the carrier in writing how it decided, and keep the answer with the file. Practice varies, so treat any rule of thumb as common practice, not law.
How does tax appear?
Tax may apply to materials, equipment or labor. Some estimates show it inside each line and others calculate it once at the end. State rules decide what is taxable. Compare the tax line with your own estimate so a tax difference is not mistaken for a scope difference.
What is the difference between RCV and ACV?
Replacement cost value, or RCV, is the estimated cost to replace or repair an item with a new one of similar kind and quality, without considering depreciation. Depreciation is the reduction in value for age, use or general condition. Actual cash value, or ACV, is RCV minus depreciation.
A common recap order is: line items plus O&P plus tax gives RCV, minus depreciation gives ACV, minus the deductible gives the final value. The order can vary by policy.
Many policies pay ACV first and release the held-back depreciation, often called recoverable depreciation, after the work is done. Some policies cover only ACV, so that gap is never paid. The policy's loss settlement terms decide which applies.
How is depreciation applied?
Xactimate lets an estimator set depreciation per line item, per project or by profile, using an amount, a percentage, age and condition, or a custom schedule. Each line can be marked recoverable or not. Depreciation can be applied to materials, non-material costs such as labor and equipment, removal, overhead and profit, and sales tax.
That is why the depreciation column deserves a second look. Note which categories were depreciated and whether the policy and state rules address them. Xactware's documentation says not all carriers and regulators allow every type of depreciation.
As one example of a statute, Florida's s. 627.7011(3)(a) says that for a loss to a dwelling insured on a replacement cost basis, the insurer must initially pay at least the actual cash value of the insured loss, minus the deductible, and pay remaining amounts as work is performed. It also has separate rules for roof deductibles, total losses and personal property. Other states differ.
What should you do with what you find?
Write a short comparison. For each difference, list the line, your figure, the carrier's figure and the supporting evidence, such as a photo, a measurement or an invoice. Keep each version of the carrier's estimate next to your own so the history is clear.
Ask the carrier to explain any line that differs from yours. Put the request in writing and keep the response in the claim file. What happens if the gap stays open depends on the policy and state law.
A quick checklist for any carrier estimate
Run these in order on every estimate you receive.
- General information matches the file.
- Price list region, version and month are right.
- Quantities match your measurements.
- Every damaged item and repair step has a line.
- O&P is present, or the reason it is missing is documented.
- Tax is present and consistent with your estimate.
- Depreciation categories are noted, and each is marked recoverable or not.
- RCV, ACV, deductible and net payable add up on the recap.
Frequently asked questions
- What does RCV mean on an Xactimate estimate?
- Replacement cost value is the estimated cost to replace or repair an item with a new one of similar kind and quality, without considering depreciation.
- What does the price list code mean?
- It names the region, Xactimate version and month and year of pricing. OHCO8X_APR24, for example, is Columbus, Ohio, version 8X, April 2024.
- What is recoverable depreciation?
- It is depreciation that some policies release after repairs are finished, so the payment moves from ACV toward RCV. Policies that cover only ACV do not release it.
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