How to Read a Repair Estimate You Receive

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An insurance repair estimate can look like a wall of numbers to someone reading one for the first time, but the structure underneath is fairly consistent regardless of who prepared it. Most estimates, whether generated through Xactimate, Symbility, or a comparable estimating platform, organize the loss by category, such as roofing, siding, gutters, or interior drywall, and then list individual line items within each category describing a specific task, a quantity, and a unit price. A line item might read something like remove and replace three-tab asphalt shingles, with a quantity measured in squares, a roofing industry unit equal to one hundred square feet of coverage, and a unit price covering both labor and material for that task.

Understanding how a unit price is built helps make sense of why two estimates for what looks like the same job can differ. Most unit prices combine a labor cost and a material cost into a single figure, and regional price lists used by estimating software are updated periodically to reflect local labor rates and material costs, which is why the same repair can price differently in Minneapolis than in a different metropolitan area. Waste factor is another detail worth watching for, since roofing and siding materials are rarely installed with zero cutoff loss, and estimates typically add a percentage above the measured area to account for material that will be trimmed and discarded during installation.

Overhead and profit is a line that appears near the bottom of many estimates, typically expressed as a combined percentage applied to the total cost of the job. This figure compensates a general contractor for coordinating and supervising work performed by multiple trades, and it is a standard and well-established component of estimating practice for jobs involving several trades working together, rather than something added arbitrarily. Its inclusion or exclusion, and the percentage applied, is sometimes a point of discussion between an insurer’s estimate and a contractor’s estimate, particularly on smaller jobs involving a single trade.

Depreciation appears as a deduction, usually itemized separately from the replacement cost figure, reflecting the age and condition of the specific material being replaced rather than the building as a whole. An estimate for a fifteen-year-old roof will typically show a different depreciation calculation than one for a roof installed five years earlier, even if the storm damage and the scope of repair look identical between the two properties. Reading the summary page at the front or back of most estimates, which typically totals the replacement cost value, subtracts depreciation, and arrives at the actual cash value, gives a faster overview than working line by line through every page.

Comparing two estimates side by side, one from an insurer and one from a contractor, is most productive when done by category and by specific line item rather than by comparing only the bottom-line totals, since a similar total can sometimes mask real differences in scope that happen to offset each other. A homeowner comparing estimates for the first time may find it useful to build a simple side-by-side list of each category, roofing, siding, gutters, and so on, noting the quantity and price each estimate assigns before drawing any conclusion about which figure seems more accurate for the actual damage present.

This article is general education about how the appraisal process commonly works. It is not legal advice, and specific procedures can vary by state and policy.

Russ Lis works nationwide as a property insurance appraiser and umpire, based in Minnesota. Contact Appraisal Resolution.