Why Xactimate Pricing "Feels Low" — Verisk Finally Explains

Xactimate pricing is always too low. Every PA says it. Every roofer says it. Even half of you have said it to me. I'm Matt, and I teach complete adjuster training that gets experience requirements waived, and I've heard the pricing complaint from every side of the table. So let's get straight to the source. In this video, you'll learn where Xactimate pricing actually comes from, how granular the data really gets, how often it updates, and why accurate is a lot more complicated than the guy waving an estimate in your face wants you to believe. Starting now. All right. There was another article that I saw on LinkedIn. Factors, I don't know if you know anything about this, but factors influencing roof risk in 2025. It says that the average roof replacement in 2025 was 33% up from the average from the prior three or four years at 17,600 so that's you know 33% from like 12 to 17,000 or something like that yeah something that yeah you can speak on uh yeah i mean it's been interesting to see how i mean just roofs in general the the the industry today so and and i know Aaron kind of mentioned to you uh Matt i've got a close friend who is an adjuster and um you know it's it's been generally just a very interesting world the last year and a half or so right for for the adjuster community no question because the the truth of the matter is it's been you know volumes have not been there um whether it's hail claims or otherwise like if it's hurricanes or or hails or whatever it's been it's been relatively quiet part of the challenge that we're seeing in the industry we've got inflationary challenges right and obviously we're seeing especially right now we're seeing ramp ups in roofing just holistically and it makes sense right asphalt shingles are going up in price um oil is really ridiculously expensive right now um and so even take take the asphalt aside from it um gas right like people having to truck in all of this all of this material and things like that just in just in gas prices it's getting ridiculous um i've got family in California and And I was talking to my dad earlier in the week and he said, I just paid seven dollars a gallon. And I was like, I can't even now. He's in the L.A. area. It's certainly not cheap there, but nor has it ever been. But seven dollars a gallon, like let that compute for a second. So how is that impacting the whole of the industry? Right. Our pricing, our pricing team is doing a ton of analysis as we speak on some of these on some of these pressures. And we just saw today, we just saw the inflation report release and inflation is back to, you know, over the course of the last 30 days, it's back to pandemic levels of inflation driven primarily by the war in Ukraine. And so we're seeing a lot of uptick in a lot of different things in a lot of different categories. It's not surprising from my perspective that all of a sudden we're seeing an increase in roofing costs. I think we're going to continue to see that as long as this as long as the war continues. I think we're going to continue to see that just by virtue of oil prices and gas prices just skyrocketing. Yeah, for sure. I'm definitely noticing it at the grocery store. I mean, I just filled up my tank and it was $4.29 a gallon here in northwest Montana. so it's not cheap like even here in Utah which we're traditionally not terribly crazy but we're paying close to five dollars a gallon as well it's kind of crazy rumor has it that the number one thing stopping new adjusters from getting deployed is experience requirements from the firms and the carriers even my training gets those waived at my partner firms so go to adjustertv.com slash certify to get signed up so pricing or like you know like uh current events and stuff like that notwithstanding i think one of the things that that maybe people don't really understand or don't maybe don't know about is that your Verisk's or Xactware price database is comprehensive and it's free it's updated every month at least as far as i know right and it's one of those things that like you you see on the the storm chaser refer and i was a chaser adjuster so i'm not disparaging at all but public adjusters and so on and so forth kind of having this perennial complaint about well exactimates too low and the insurance companies like them because they're cheap and you know as far as their the pricing in there but i i found that if i wrote the estimate correctly the way it was supposed to be you know that that contractors didn't have a problem with i mean i'd say this is what i came up with just now that looks good we'll do it and it was never a problem um so i'm curious maybe kind of fill in like how that's that side of things works um in the industry and you know where the pricing comes from how granular granular do you guys get and and how accurate is it right yeah well i mean it's it's an interesting question and it's funny that you bring that up matt because you know if you talk to greg pine who's on a pricing team or jason taylor um they'll tell you um we know we're doing pretty well with pricing when the carriers tell us it's too high and the contractors tell us it's too low and so you know you're somewhere in the middle somewhere right and and if everybody's mad then you're probably doing a good job is kind of the is kind of the the uh the running joke that we have because the truth of it is uh i mean we're in an a unique situation um unlike probably most other companies in the insurance industry is you know we are kind of this price validator effectively for the industry to make sure that everybody is you know everybody is pricing correctly and and effectively and i think um you know there's a substantial amount of research that goes into it and i know that, you know, depending on who you talk to, there's all kinds of interesting commentary that I've heard over the course of my time here at Xactware, where people have said, well, all you do is listen to the carrier's pricing. You don't take into consideration the contractor's pricing. And I've heard the exact opposite. You just pay attention to the contractor pricing. You don't really pay attention to what our pricing is. It's an interesting paradigm that we exist in. And the truth of it is we are out surveying. We get data feeds. We have data flowing into us from many different areas, whether that's from supply houses and the like directly from retail shops like Home Depot and Lowe's and stuff that they're providing. and we leverage some of their pricing data, but we're also out doing surveys and asking contractors, okay, what are you charging? Whether that's on the retail side or the insurance side, but we're doing a lot of work to figure out what those prices are and how that makes sense. So we're not just pricing at an aggregate level though, so keep that in mind. We're actually finding out how much are the nails costing to do carpet work, finish work, or whatever. There's a lot of data points that flow in and a lot of data points that we ingest that help us create kind of that pricing methodology that that we leverage you know we put it into the the soup and we have our you know we have a variety of algorithms that we run through all kinds of data analyses that we actually run through to come up with our pricing it's not it's a very scientific methodology and we've been doing it for a number of years we've refined it over the years we've made it better we've improved areas categories, the way that we research. And we're continuing to do that as we move into this new era of data and AI technologies and things like that. Those are areas that we're also looking at how we can leverage the new tools that are available to improve the way that we ingest data, to improve the way that we serve up the data to those who are using our solutions. There's a lot there, but it's something that we're constantly refining, constantly chasing. Accuracy is an interesting word. I mean, ask anybody to get a remodeling job for their kitchen and call up three contractors and see where that land. Yeah, for sure. It's all over the map, right? Like accuracy, accuracy is, is, is an interesting word. And I, I, I struggle with, with that word specifically because accuracy sometimes is in the eye of the beholder, right? Like it's accurate to me. Is it accurate to you? Well, it may not be right. I see blues more vibrantly than everybody else says, does that mean my vision is more accurate than everybody else's vision? It could be argued, but that doesn't necessarily mean anything. So it's an interesting term. I think accuracy is extraordinarily important to us. And we are constantly chasing what we believe should be the right cost for doing work within this industry. And that's really what we're doing. And so you see our prices change, but that's on purpose, right? Because what is a fair and balanced price today may not be the case tomorrow because of inflationary pressures, because of like we just talked about gas or something like that, right? And so we're constantly refining and improving the way that we present that price. And if you want to know if AI is really going to replace insurance adjusters, check out this video right here. And as always, thank you so much for watching and have a great storm.