How Restoration Companies Calculate Water Damage Estimates

What Xactimate Is and Why It Matters

Xactimate is property estimating software developed by Verisk Analytics. It contains a database of standardized prices for every construction and restoration task, updated monthly to reflect current material and labor costs in each geographic market. When a restoration company writes an estimate "in Xactimate," they are selecting line items from this database and applying quantities based on their measurements of your damage.

The software matters because approximately 85% of insurance carriers use Xactimate to evaluate claims. When both the restoration company and the insurance adjuster use the same software and pricing database, there is a common language for the estimate. Disagreements focus on the scope (what work is needed) rather than the pricing (how much each task costs), because the pricing comes from the same database.

Restoration companies that do not use Xactimate often experience slower claim processing, more disputes with adjusters, and more supplements. If you are filing an insurance claim, choose a restoration company that writes Xactimate estimates.

The Inspection and Measurement Process

The estimate begins with a thorough inspection where the technician documents the damage using moisture meters, thermal imaging, and visual assessment.

Moisture mapping. The technician takes moisture readings at multiple points across walls, floors, and ceilings using pin-type and pinless moisture meters. These readings are recorded on a floor plan (the moisture map) that shows exactly where moisture is present and at what levels. The moisture map defines the boundaries of the affected area, which determines the scope of every line item in the estimate.

Thermal imaging. Infrared cameras detect temperature differences that indicate moisture behind surfaces. Wet areas appear cooler than dry areas on the thermal image because evaporation cools the surface. Thermal imaging reveals hidden moisture in wall cavities, ceiling spaces, and under flooring that pin meters might miss.

Room measurements. Every affected room is measured for length, width, and ceiling height. The technician notes affected wall sections (length and height of water damage), floor area, ceiling area, and the materials in each area (drywall, plaster, tile, hardwood, carpet, etc.). These measurements are entered into Xactimate as the basis for quantity calculations.

Photographs. Extensive photographs document the damage before any work begins. These photographs support the estimate line items and are included in the insurance claim documentation. Good photo documentation prevents disputes about the original scope of damage.

What the Estimate Includes

A complete water damage estimate has two main sections: mitigation (emergency response and drying) and reconstruction (repair and rebuild). Some companies provide both sections in one estimate, while others provide a mitigation estimate first and a separate reconstruction estimate after drying is complete and the full scope of needed repairs is known.

Mitigation line items include emergency service call and travel, water extraction (per square foot, varies by method), equipment placement and daily monitoring, air mover rental (per unit per day), dehumidifier rental (per unit per day), HEPA air scrubber rental (per unit per day, for Category 2 and 3), antimicrobial treatment (per square foot), demolition of non-salvageable materials (per square foot or linear foot), content manipulation (moving furniture and belongings out of work areas), debris removal and disposal, and final moisture readings and documentation.

Reconstruction line items include drywall removal and replacement (per square foot by wall or ceiling), insulation replacement (per square foot), flooring removal and replacement (per square foot by material type), baseboard and trim replacement (per linear foot), painting (per square foot), electrical inspection and repair (per fixture or outlet), plumbing inspection and repair (if applicable), and final cleaning of the restored area.

How to Read and Compare Estimates

When you receive an estimate from a restoration company, look for these elements to evaluate its completeness and accuracy.

Line item detail. Every task should be a separate line item with a description, quantity, unit of measurement, unit price, and line total. An estimate that groups multiple tasks into one lump-sum line ("drying services: $3,500") is less transparent than one that itemizes each piece of equipment and each day of operation.

Scope accuracy. Compare the estimate scope to what you see. If the estimate shows 200 square feet of drywall removal but your damaged wall section clearly spans 300 square feet, the estimate is under-scoped. Under-scoped estimates lead to supplements (additional charges during the project) that surprise homeowners.

Equipment quantities. For drying, the estimate should specify the number of air movers and dehumidifiers and the expected number of days. The IICRC provides guidelines for equipment placement (roughly one air mover per 10 to 16 linear feet of wall and one dehumidifier per 1,000 to 1,500 square feet of affected area for Class 2 damage). Significantly fewer units suggest the company is under-equipping the job, which extends drying time.

Overhead and profit (O&P). Most restoration estimates include a 10% overhead and 10% profit markup on the total, standard in the industry and accepted by insurance carriers. Some companies roll O&P into their line item prices instead of showing it separately. Either approach is acceptable, but understand which method the estimate uses when comparing quotes.

When Estimates Need Supplements

A supplement is an additional estimate submitted after the initial estimate when the scope of work increases beyond what was originally documented. Supplements are common in water damage restoration because some damage is hidden until demolition begins.

Common reasons for supplements include mold discovered behind drywall during demolition, subfloor damage found under carpet or tile that was not visible during inspection, electrical damage discovered when outlets or wiring behind walls are exposed, additional rooms affected that were not identified during the initial inspection (moisture migrated through wall cavities), and extended drying time beyond the initial estimate (some structures dry slower than expected).

Supplements are normal and expected, but they should be documented with photographs and moisture readings just like the original estimate. Your insurance company reviews and approves supplements the same way they approve the initial estimate.