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Yep plaintiff do this in all the lawsuits. You will have all 5 estimates with a differant price for an operation and contractors saying they are all too low or they will take all you can send them.  Makes you think that xware is not the bible, I never did and never will think it was the bible. Mr Wright describes me as a person full of hate. Could he be a xmate instructer in the "stick it to em school... with a  scetch diagram of the body part?

Ray and MBoy are correct, of course, to the extent they note some variables that produce different final damage estimates.

My question is more direct i.e. comparing the database unit-cost pricing among multiple estimating programs for exactly the same scope? i.e. all things being equal (the scope) then why are unit costs different and if different then what accounts for the differences and are those differences defensible?

Notwithstanding that component costs may be allocated in the unit pricing differently within any given price database, the damage totals should cloesely approximate each other regardless of the estimating software used. Theorectically, I should be able to use any adjuster's scope written in Xactimate (for example) and enter it into any other estimating software and produce the same final amounts. If those amounts are not the same then I want to know why the difference(s) and which is correct.

Simplest way to determine is for the same estimator to enter the exact scope into each of multiple estimating software to see how the final totals * compare; then undertake to review each line item unit cost to see why the difference.

Final total damage estimates should theoretically be equal regardless of the estimating software so, why are they not (if not) and which is correct?

Further, if certain carriers are using 'custom' pricing databases, what are the basis for the pricing they use and is it defensible?

* Keep in mind that final damage totals are only one aspect of the loss adjustment. Unit costs can affect ACV and RCV payments so their appropriateness and accuracy are prime consideration.

I would think that if you wrote the estimate in four different estimating softwares, then you would get four different repair amounts. 

You could probably have four different estimators write the same job with the same software and get four different amounts, but that is a different issue.

If you actually did the job and tracked all of your costs incurred to do the job, and you would get a fifth amount, much less than any of the four above prices.

If you give that list of incurred costs to four different fire restoration contractors, you will get four more different estimate amounts.  These four might or might not be more than the four that came out of the estimating programs the first time.  Here the difference is obvious, it is what the contractor want to make for doing a job.  I believe Mr. Postava has stated, and I heartily agree, that this is the largest cause of price difference between contractors.  There is no way for a repair database to anticipate, or even track, what a contractor wants to make on a job.  This is the crux of the problem of compiling an insurance repair database, which I have done.

Which of these nine prices is the correct one?  Of course, it is the one that gets the insured's property back into the state it was before the loss.  One that the carrier will pay and the contractor will accept.  Which of the eight possibilites (obviously it is not the incurred costs price) would this be?  That answer would probably be different for each insured.

There does not exist a insurance repair database, that I am aware of, that can tell you what something should cost in a certain town on a certain day.    If you cannot figure out what something costs, you cannot figure what someone wants to charge for it.

While it would be possible to figure costs for an operation in a certain place on today's date, it still would not anticipate what the various contractors would charge for that operation, so it would not reflect market costs.

Do I think that prices in some database are artificially low?  Yes.  Do the tools to prove this exist?  No.

It almost seems a miracle any claim gets closed. 

And over the course of my twenty one years in the industry, I have met many wealthy insurance repair contractors.  Many more that I have met wealthy cat adjusters.  The contractors seem to do alright if the prices are artificially low.  Look at the marketing BalFore does and tell me insurance contractors are underpaid.  That overhead gets covered somewhere.

But that's just my opinion, I could be wrong.

Jeff

We have noticed a closing in the price gap between residential and commercial roofing labor charges. Not sure why that is the case unless roofing companies that do both have decided to bid residential like they do commercial roofs.

This may not be the case but to me it seems Xactimate is dragging repair prices higher over time.

For the most part at carriers I think adjusters have stopped adjusting and started buying the contractor's line "well that is what Xactimate states is the correct price".

Staff adjusters seem to be into appeasement vs. adjustment because they do not want to have the contractor to support his pricing, deal with a public adjuster or "fear" a lawsuit because they did not use Xactimate/ISO "correct" prices.

Carriers I think know this "Xactimate/ISO" effect as I call it can increase payout but when appeasement and not adjusting is the objective then that can be the results.

Maybe Xactimate is the pricing bible but here is what I think may be happening.

A storm comes and the contractor increases charges. This is not some % "storm" charge but a change in base per square cost. Then Xactimate sees this price increase using Xactnet data or by directly contacting contractors and it gets reflected in future pricing updates.

Prices start to return to pre storm prices. Adjusters question the old higher prices but the contractor states "well that is what Xactimate states it the correct price" then carrier appeasement kicks in and they say OK to the Xactimate/ISO database pricing. Later then there is another storm and prices goes up and this gets reflected in new prices updates from ISO and the cycle repeats once again.

Surely ISO is trying to do something to control any price creep I that they may be causing but personally I think it is real based on what  we have seen at least in residential roofing cost alone over the past five years.

I think the carriers know this and know they are enabling it. Will they ever change their position remains to be seen. What would have to happen to make them question their payout on property claims?

If premiums increase based on increased contractor charges then who is helped/hurt if there is a price "creep" actually occurring as a results of the methodology used by Xactimate/ISO in this matter?

If this is actually occurring by default then who is feeling the gain and who is feeling the pain?