How to Read an Xactimate Estimate as a Roofing Contractor: A Line-by-Line Breakdown

You just received a Xactimate estimate from the insurance adjuster. You open it and see columns, codes, abbreviations, and numbers everywhere. If you're new to this, it looks like a foreign language. Even if you've been doing this for years, you might not know what every field means or why certain things are the way they are.

Here's the thing: understanding Xactimate is a core skill for roofing contractors. You need to read these estimates quickly, spot missing items, verify quantities, and know exactly what the insurance company is authorizing you to do. This guide walks you through every section of a typical Xactimate roofing estimate so you can read one like you've been doing it for twenty years.

What Is Xactimate?

Xactimate is the industry-standard software that adjusters use to write insurance estimates. It's made by a company called Xactware (owned by Verisk). Almost every property damage claim you'll encounter—whether it's homeowners, commercial, or auto—is estimated using Xactimate.

Why does this matter? Because Xactimate has a specific structure. There are standard codes, standard columns, and a standard format. Once you understand one Xactimate estimate, you can read any of them. The structure is consistent whether it's a $5,000 roof or a $500,000 water damage claim.

Key fact: Xactimate isn't just an estimating tool—it's a communication tool. The format tells you exactly what damage the adjuster documented, how much work they're authorizing, and how much they're willing to pay.

Reading the Header Section

The first page of any Xactimate estimate contains header information. This is administrative data, but it's critical. Here's what you need to pay attention to:

The Top Fields

Why this matters: The date of loss determines how depreciation is calculated. If damage occurred 6 months ago and the estimate was written 8 months later, that lag time affects depreciation amounts. Also, knowing the adjuster's name and contact information is essential when you need to ask questions about line items or submit a supplement.

Claim & Policy Numbers (Critical for Everything)

Near the top of the estimate, you'll find:

• Claim Number: This is the unique identifier for the insurance claim. You'll reference this in every supplement, payment request, and communication with the insurance company.
• Policy Number: The homeowner's insurance policy number.
• Insured Name: The homeowner's name.
• Property Address: Where the work is happening.

Action item: Write these numbers down immediately. Use the claim number on every piece of correspondence. Insurance companies have hundreds or thousands of claims in their system. Without a claim number, your supplement or payment request will get lost.

Understanding Line Item Structure (The Heart of the Estimate)

Below the header information comes the actual line items. This is where the real information lives. Each line item represents a specific repair or material. For a roofing job, you might see 15 to 40 line items depending on complexity.

A typical line item row contains these columns from left to right:

1. Category Code - Identifies what type of work this is
2. Description - What's being repaired or replaced
3. Unit - How it's measured (SQ, EA, LF, etc.)
4. Quantity - How many units
5. Unit Price - Cost per unit
6. Total - Quantity × Unit Price
7. O&P (Overhead & Profit) - Contractor markup percentage
8. O&P Amount - The dollar amount of markup
9. Subtotal - Total + O&P
10. Depreciation % - Age/wear deduction percentage
11. Depreciation $ - The dollar amount deducted
12. ACV (Actual Cash Value) - What insurance will pay

This might look overwhelming, but once you understand each column, reading a line becomes simple. Let's break them down one at a time.

Category Codes Explained (What the Numbers Mean)

Xactimate uses standardized category codes. These are three-digit codes that tell you what type of work is being estimated. For roofing, here are the most common codes you'll see:

The Description Column (and What It Tells You)

The description is your most important clue about what's included and what might be missing. Descriptions vary from vague to detailed depending on the adjuster.

What a Good Description Looks Like

"Asphalt Shingles, 3-Tab, Standard Grade, 25-yr Warranty, Labor Remove & Install, per Square, Wind Damage Loss"

This tells you:

• Material type (asphalt shingles)
• Grade (3-tab, standard)
• Warranty (25-year)
• Labor included (remove and install)
• Unit (per square, meaning 100 sq ft)
• Reason (wind damage loss)

What a Vague Description Looks Like

"Roof Shingles - Labor"

This is too vague. You don't know what grade of shingles, what warranty, whether both removal and installation are included. This is a common place where adjusters skimp. When you see vague descriptions, write them down as potential supplement items. You'll want to clarify with the adjuster or document exactly what you're using.

Red Flag Descriptions

• "Roof replacement per ALE schedule" - Means they're using a preset template, not measuring your actual roof
• "Estimated" - Adjuster didn't measure or verify exact quantities
• "Per estimate prepared by" - They're using someone else's numbers, not their own inspection
• "Labor only" - This line is labor without materials (check if materials are listed separately)

Unit, Quantity & Unit Price Columns

These three columns tell you the exact scope of work the adjuster documented.

Units (How It's Measured)

Different items use different units:

• SQ - Square (100 square feet). Most common for roofing.
• EA - Each. Used for individual items like skylights, vents, or penetrations.
• LF - Linear feet. Used for gutters, flashing, trim, and siding.
• SF - Square feet. Sometimes used for smaller roof areas or detail work.

Quantity (How Many Units)

This is where you verify the scope. For example:

• If shingles are listed as "5 SQ", the adjuster is saying 500 square feet of roof need replacing.
• If tear-off is listed as "5 SQ", disposal is calculated for 500 square feet of old material.
• If fascia is listed as "120 LF", that's 120 linear feet of fascia board.

This is critical: Compare the quantities in the estimate to what you see on the actual roof. Adjusters estimate from ground level, photos, or brief walkthroughs. They often underestimate quantities. If the roof is 8 squares of damage and the estimate says 5 squares, that's a 3-square supplement right there.

Unit Price (Cost Per Unit)

This is what Xactimate charges per unit. Prices vary by region and are updated regularly. You don't typically control this—Xactimate's pricing database determines it. However, you should understand it:

• If unit price seems low, it might be because it doesn't include labor, removal, or disposal.
• If unit price seems high, check the description to see what's included.
• Unit prices can vary significantly between regions. A roofing square costs more in San Francisco than in rural Texas.

Check regional pricing variance if something looks off. If you're in a high-cost area and the estimate looks cheap, it might not reflect your actual market conditions.

O&P Columns (Overhead & Profit) - The Contractor's Markup

Every line item in Xactimate has an O&P (Overhead & Profit) component. This is the contractor markup.

How It Works

The O&P column shows a percentage (often 25%, 30%, or 35%). This percentage is applied to the material cost to account for your overhead (truck, insurance, payroll, office) and profit (your income).

Formula: (Total Cost × O&P %) = O&P Amount

Example:

• Material cost: $2,000
• O&P %: 30%
• O&P Amount: $600
• Total with O&P: $2,600

Why This Matters

Important: The ACV (what insurance pays you) is calculated BEFORE depreciation is subtracted. The O&P is built in. You're not getting percentage markup taken away. You're getting the material cost, the labor to install it, AND your markup. Then depreciation is applied to the total.

The O&P percentages vary by line item and category. Labor-intensive items (like tear-off) might have higher O&P than material-heavy items (like shingles). This is normal.

Depreciation & ACV/RCV Columns (What Insurance Actually Pays)

This is where the insurance company reduces what it owes you. Understanding depreciation is essential for knowing what you're actually authorized to collect.

RCV vs. ACV

Insurance policies offer two types of coverage for roofing:

• RCV (Replacement Cost Value): Insurance pays for brand new materials and labor. You get the full amount with no depreciation deducted. Most modern homeowners policies are RCV.
• ACV (Actual Cash Value): Insurance pays depreciated value. A 10-year-old roof on an asphalt policy might be depreciated 20-30% because the roof was 70-80% through its service life when damaged. You get less.

How Depreciation Is Calculated

The depreciation percentage depends on:

• Age of damaged components
• Expected lifespan of materials (roofs are typically 20-25 years)
• The insurance company's depreciation schedule
• The policy type (RCV or ACV)

Example:

• Subtotal with O&P: $10,000
• Depreciation %: 25%
• Depreciation Amount: $2,500
• ACV (Insurance pays): $7,500

In this case, insurance is saying "Your roof is 25% depreciated, so we're deducting 25% of the cost."

The Critical Question: RCV or ACV?

Look at the estimate header. It should state which basis is being used. If it says "RCV" (Replacement Cost Value), depreciation should be 0% or minimal. If it says "ACV," you'll see significant depreciation percentages.

Contractor tip: If the policy is RCV but the estimate shows depreciation, that's a red flag. You might have grounds to request the depreciation be removed or supplemented later when you get the actual RCV payment.

Waste Factors & Deductibles

Near the bottom of the estimate, before the grand total, you'll see two more items:

Waste Factor

This is a percentage added to account for cutting waste, spillage, and material loss during installation. For roofing, waste factors typically range from 5% to 15%.

• 5-10%: Typical for clean, straight rooflines
• 10-15%: Roofs with complexity—multiple peaks, dormers, vents
• Over 15%: Unusual. Might indicate the adjuster recognized significant complexity

Action item: Check if the waste factor is adequate for the actual roof. Complex roofs with multiple peaks and penetrations might need 15%. If the waste factor is low and you know the roof is complex, note it for supplementing.

Deductible

The deductible is subtracted from the estimate total. The homeowner's policy deductible (usually $1,000-$2,500) is applied here.

How this works: The insurance company pays (Estimate Total - Deductible). The homeowner is responsible for the deductible amount.

For you as a contractor: The amount after the deductible is what's typically available for the claim. If the estimate total is $10,000 and the deductible is $1,500, there's $8,500 available. The homeowner either pays the deductible upfront or covers the shortfall after insurance payment.

The Summary Page (Total Amounts)

The last page of the estimate contains summary totals. This is where all the line items are added up. Here's what you'll see:

Bottom line number: "Insurance Authorization" or "Amount Insurance Will Pay" is the number you're working with. This is what's approved. Anything beyond this requires a supplement.

Practical Example: Reading a Real Estimate

Let's walk through a sample line item together so you can see how all these columns work together:

What this means in plain English: The adjuster is authorizing the replacement of 5 squares of shingles. The total cost is $2,275 (materials, labor, and contractor markup). After depreciating for the roof's age, insurance will pay $1,820. If the deductible is $1,000, the actual check will be for $820.

Now, as a contractor: If you believe the roof is actually 6 squares (not 5), or if you believe the depreciation should be lower, those are your supplement items.

Using Your Xactimate Knowledge for Supplements

Understanding how to read Xactimate is the foundation for writing good supplements. Once you know what the adjuster documented, you can identify what they missed.

Common Gaps to Look For When Reading Xactimate

• Missing quantities: Does the roof documentation match what you see? Missing penetrations (skylights, vents)?
• Missing line items: Is removal/disposal (category 041) listed separately? Are secondary areas (fascia, gutters, soffits) included?
• Vague descriptions: Can you tell exactly what materials and labor are being authorized?
• Unrealistic pricing: Does the unit price match your regional market?
• Missing structural damage: Any signs of rotted decking, damaged trusses, or other structural issues not documented?
• Improper depreciation: If this is RCV, why is there depreciation?
• Low waste factors: For complex roofs, is the waste factor adequate?

For more details on specific supplemental items, see our complete list of roofing supplement line items.

Putting It All Together: Your Xactimate Reading Checklist

Here's a practical checklist to use every time you receive a Xactimate estimate:

Header Information

• [ ] Write down claim number and policy number
• [ ] Note adjuster name and contact information
• [ ] Check date of loss vs. inspection date (are they close?)
• [ ] Verify property address

Overall Assessment

• [ ] Is this RCV or ACV? (Check the header)
• [ ] What's the total insurance authorization?
• [ ] What's the deductible amount?
• [ ] Are there any red flags in the summary (unusually high/low amounts)?

Line Item Review

• [ ] Do quantities match the actual roof size? (Verify in person)
• [ ] Are all main categories represented? (040, 041, 042, 050, 051)
• [ ] Are descriptions clear enough to understand what's authorized?
• [ ] Do O&P percentages look reasonable?
• [ ] Is waste factor appropriate for roof complexity?

Red Flags

• [ ] Any missing items categories or vague descriptions?
• [ ] Quantities that seem low?
• [ ] Unit prices that seem out of market?
• [ ] Secondary damage (fascia, gutters, soffits) not included?
• [ ] Structural damage (rotted decking, damaged trusses) not documented?

What Happens Next

Once you've read and understood a Xactimate estimate, you have a few paths forward:

Path 1: Proceed with the estimate as written. If quantities and scope match your inspection, you can move forward with the authorized work.

Path 2: Ask the adjuster questions. If something is unclear (vague description, missing items), contact the adjuster directly. They might clarify or add items to the estimate.

Path 3: Prepare a supplement. If you find significant gaps—missing quantities, secondary damage, structural issues, or inadequate pricing—document your findings and submit a supplement.

Final Thoughts

Xactimate estimates look complicated at first, but the structure is logical once you understand it. Every column serves a purpose: describing the work, quantifying it, pricing it, and showing what insurance will pay. Your job is to read carefully, compare to reality, and identify gaps.

The contractors who master Xactimate reading are the ones who consistently find supplements. They know exactly what was documented, what was missed, and where to look for additional revenue. That skill directly translates to more profitable jobs and better relationships with insurance companies.

Start with our checklist above. Use it on your next few estimates. Within a week, you'll be reading Xactimate like you've been doing it for years. And once you can read them quickly, you can spot opportunities faster than anyone else in your market.

Next Steps

Want to deepen your knowledge? Read our guides on supplemental roofing line items and how to calculate overhead and profit correctly. Both will help you write stronger supplements once you identify gaps in an estimate.

Ready to start analyzing estimates faster? ClaimStack uses AI to read Xactimate estimates and flag missing items automatically. Upload your first estimate for free—no credit card required.