HomeLearnContractor Higher Than Insurance

Problem Pages

My Contractor's Estimate Is Higher Than What Insurance Approved — Now What?

By Mike — Licensed GC & Public Adjuster — 12 min read

Your contractor says $18,000. Your insurance company approved $11,500. This gap is not a mistake, and it is not your contractor being greedy. In most cases, this is exactly how the insurance claim system works — and there is a very specific process to fix it.

Why This Gap Exists

Insurance adjusters use software called Xactimate to price repairs. Xactimate uses regional pricing databases that are often significantly below actual market rates for your area. Your contractor is pricing the real world. That is the gap.

Xactimate pricing is often 6-18 months behind current market labor and material costs.

Adjusters may miss line items entirely — items your contractor sees that the adjuster never documented.

Code upgrades are frequently excluded from initial estimates unless you specifically fight for them.

Overhead and profit (O&P) — the contractor's legitimate business costs — are often disputed or excluded.

What You Should Do — Step by Step

1

Get Your Adjuster's Line-Item Estimate

Request the full Xactimate printout from your insurer. This shows exactly what they priced and what they excluded. You cannot fight what you cannot see.

2

Have Your Contractor Create a Matching Line-Item Estimate

Ask your contractor to format their estimate in the same line-item structure. This makes it easy to show the adjuster exactly where the gaps are — line by line.

3

Document the Differences in Writing

Create a comparison document that shows every line item your contractor included that the adjuster missed or priced lower. Include photos and supporting documentation.

4

Request a Re-Inspection or Supplement

File a formal supplement claim with your insurance company. Supplements are very common in the industry — this is not unusual or aggressive, it is expected.

5

Demand Overhead and Profit

If you are using a general contractor to manage the project, you are legally entitled to Overhead and Profit (O&P) — typically 10% and 10%. Many adjusters exclude this until challenged.

6

Escalate to Your State Insurance Commissioner If Needed

If the insurer refuses reasonable supplements, you can file a complaint with your state's department of insurance. This is often enough to trigger a resolution.

Matching Materials Requirement

Know your state laws: Many states have laws requiring insurance companies to replace materials that match the undamaged portions of your home — including shingle color, siding color, and material grade. If your adjuster is trying to replace only the damaged section with a different material, research your state's matching law and cite it in writing.

Never sign a release or accept a final settlement check until every supplement has been submitted and considered.

Everything must be in writing — verbal agreements with adjusters mean nothing.

Take photos of every single damaged item before anything is touched.

Track every conversation with your insurer in a claim journal, including dates, names, and what was discussed.

Ready to Take Control of Your Claim?

Everything you just read is built into Claim Advisor Pro. Track photos, estimates, receipts, and policy information — organized and ready when your adjuster arrives. Built by a licensed GC and public adjuster with 3,000+ claims settled.

Step-by-step claim guidance
Photo & document organization
AI Claims Assistant (Ask Mike)