Getting A Fair Estimate to Rebuild or Repair Your House

This is Part 3 of a three-part guide on Rebuilding After the California Wildfires.  You can jump to Part 1: How To Avoid Scams and Find a Trustworthy Contractor or Part 2: First Steps in Your Insurance Claim

Following damage to a home, the insurance company will dispatch insurance adjusters who will come and survey the property and interview the homeowner in order to prepare an estimate of the cost of repair or replacement.  An adjuster may be available immediately after an isolated event, but in the aftermath of a significant natural disaster like the wildfires in the North Bay, it can take several weeks to get an appointment.

Insurance companies may also hire additional adjusters on a contract basis in order to meet a high volume of claims.  It’s important to remember that an adjuster is paid to 1) minimize risks for the insurance company and 2) to close files in a timely manner.  They are not inherently motivated to ensure everything is accounted for in your estimate, or that you receive the full reimbursement amount in your agreement.

One of the challenges of creating an estimate for rebuilding is that the insurance adjuster may have a different idea of the pre-damaged home than the homeowner. Many homeowners also choose not to restore the exact same house, so a new proposal from a contractor will not reflect the cost of replacement.  The way to overcome these obstacles is to convey the condition of your pre-loss home as accurately as possible.  The adjuster will create a “scope of loss” based on details provided from the homeowner, so it’s crucial that items are not left out or they will not be calculated in the total final estimate.

With all of the chaos and hardship ensuing a traumatic event, it can be difficult to remember all the features and upgrades you have implemented in your home over the years. There are, however, sources that can help give you a more complete picture of your home before the loss.

1. Ask the realtor who helped you purchase the home to provide a copy of the MLS listing, the property condition inspector’s report and the appraisal
2. Reach out to contractors you hired for building plans and documentation on the scope of work
3. Ask the building department to provide plans or building permit records for your home
4. If your home was renovated before your purchase, you can find the contractors listed on past building permits and request to see plans
5. If actual plans are not available, some insurers will pay for “as built” drawings to be prepared to document what existed before the loss

What is Xactimate?

Xactimate is the estimating program most commonly used by insurance adjusters to calculate the value of your home before the incident.  Knowing a bit about the program will help you better understand the estimate you are presented with, and whether everything has been accounted for.

• Xactimate calculates estimates by room, so make sure larger functional aspects of the building such as roofs, plumbing systems, or external finishes are not omitted.  The accuracy of room dimensions is also crucial, as it can skew the total square footage and volume of the space.
• Waste materials should be taken into account as carpet, flooring or other materials are ordered in slight excess.
• Contractor overhead and profit (OH&P) should be included either in-line or at the bottom. The average for a single-family home project is around 20%.
• Soft or indirect costs include architects, engineers, permit and city fees, and construction insurance.
• Xactimate uses a quarterly price-list to estimate unit, labor, and material costs based on the market fluctuations in a given region. Check to make sure the price-list is for your state and up to date.

If you have any doubts or hesitations about how your estimate was calculated, ask the adjuster. Don’t be afraid to challenge the adjuster and don’t be afraid to ask dumb questions. No one expects you to be a professional estimator!

Use our Complimentary Contractor Concierge Service

If you’ve been affected by the California wildfires, our free personal concierge is available to walk you through restoring your home. You can either tell us about your project here or call our concierge team on (707) 617-1004.