The insurance industry’s most widely used estimating software has become a tool for systematically underpaying claims, according to Stephen Harmon, who trains senior adjusters for major carriers worldwide on the Xactimate platform.
Harmon, who works with Trident Group Inc, has spent years teaching insurance professionals how to properly use Xactimate, the industry-standard software for calculating repair and replacement costs. Through his extensive training experience with adjusters from the largest insurance companies globally, he has witnessed firsthand how the software’s features are being exploited to produce artificially low estimates.
Xactimate, developed by Verisk Analytics, dominates the property insurance estimating market with roughly 80% of insurers relying on its pricing database and calculation tools. The software was designed to standardize claim estimates and ensure fair compensation for policyholders. However, training experts like Harmon are now sounding the alarm about systematic misuse.
The manipulation tactics range from selective use of pricing data to deliberate omission of necessary repair items. Adjusters are being instructed to input minimal scope details, choose lower-cost materials that don’t match existing structures, and ignore industry-standard repair methods that would increase claim values.
For homeowners and contractors, these lowball estimates mean fighting protracted battles to receive fair compensation for legitimate damages. What should be straightforward claims based on actual repair costs become adversarial negotiations where policyholders must prove why the insurance company’s own software-generated estimate falls short.
The consulting firm where Harmon conducts his training has documented numerous cases where initial Xactimate estimates came in 30-50% below actual repair costs. These discrepancies aren’t random errors but reflect systematic approaches to estimate manipulation that have become standard practice across the industry.
The implications extend beyond individual claims. Contractors must choose between accepting inadequate payments or spending resources fighting for proper compensation. Many homeowners, lacking expertise in construction costs and insurance procedures, simply accept the lowball offers, never realizing they’ve been shortchanged.
As one of the few professionals who trains adjusters across multiple major carriers, Harmon occupies a unique position to observe industry-wide practices. His insights reveal how software intended to create transparency and fairness has instead become a sophisticated tool for claim suppression.
The situation highlights a fundamental conflict of interest in the insurance industry. While carriers market themselves as protectors against financial loss, their profit models incentivize paying out as little as possible on claims. Xactimate provides the veneer of objectivity to what has become a systematic effort to minimize payouts.
For policyholders facing property damage claims, understanding these tactics becomes crucial. Working with professionals who understand both proper Xactimate usage and common manipulation techniques can mean the difference between accepting an inadequate settlement and receiving fair compensation for losses.
Trident Group Inc continues to provide training and consulting services aimed at ensuring proper use of estimating software, while also educating stakeholders about the widespread misuse affecting millions of insurance claims annually.
