May 1, 2026
What is Xactimate? Xactimate is the insurance industry’s standard estimating software, used by adjusters, TPAs, and restoration contractors to write property damage estimates. Proficiency in Xactimate — including supplement billing and line item accuracy — directly determines a restoration company’s gross margin.
I’ve reviewed thousands of restoration estimates over 36 years. The pattern is consistent: the average restoration estimator writes 70-80% of the job. The other 20-30% is real work that was done or needs to be done — and it never gets billed.
On a $20,000 water mitigation job, that’s $4,000-$6,000 of legitimate, documentable, billable work that went uncompensated. On a $3M company running 150 jobs per year, that gap compounds into several hundred thousand dollars of margin left on the table annually.
Estimators write the obvious items and miss surrounding scope. They don’t supplement systematically because the process feels confrontational. They use default labor rates without locality adjustment. They miss time-and-material opportunities on complex jobs. And they don’t document for defensibility — line items must be supported by photos and notes, and estimators who don’t document systematically write estimates vulnerable to adjuster challenge.
Detach and reset items: baseboard removal and reinstallation, door detach and reset, carpet detach and reset, cabinet toe kick removal. Structural drying documentation: daily drying logs (billable time), moisture mapping, equipment monitoring visits. Content-related items: content manipulation and move-out, content protection, pack-out. Environmental and safety: antimicrobial application, PPE for Category 2/3 water, containment. Administrative: job management and project administration (a legitimate Xactimate line item), permit acquisition.
Step 1: Conduct a retroactive audit on the last 20-30 closed jobs — where do you consistently under-scope? Step 2: Build a scope checklist by job type that every estimator runs on every job. Step 3: Establish a supplement process — every job gets a review at 50% completion, supplements over $500 submitted within 72 hours. Step 4: Train documentation discipline — every line item over $200 supported by at least one photo. Step 5: Review Xactimate pricing quarterly and advocate for geographic adjustments.
What is supplementing in restoration? Supplementing is submitting additional charges after an initial estimate has been approved — for work discovered during mitigation, not visible at the time of the original estimate, or excluded from the initial scope. It is a legitimate and common part of professional restoration practice.
What is the difference between Category 1, 2, and 3 water damage? Category 1 is clean water (broken supply line). Category 2 is gray water with contamination. Category 3 is black water with serious contamination (sewage, flooding). Classification affects scope, PPE, antimicrobial treatment, and material removal decisions — and significantly affects estimate cost.
Mike McCabe is The Profit Detective — a 36-year restoration industry veteran, Master Restorer, and Fractional Operations Manager at Floodlight Consulting Group.
Most engagements pay for themselves within the first week.