Decoding the Carrier's Estimate

Read every section. The summary that hides the lowball. 5 things to verify against your scope.

What you'll learn

How to read every section of the carrier's claim estimate document. The summary that hides the lowball. The 5 things to compare against your own scope. The hidden "exclusions" deep in the math.

6.1.1 What the carrier sends

Within ~30 days of inspection, you typically receive a claim estimate package:

Document	What's there
Coverage decision letter	Approval, partial approval, or denial — w/ reasoning
Xactimate estimate	Line-item scope + pricing
Photos	Carrier adjuster's photos
Engineering / expert reports (if applicable)	Causation, scope, quantum opinions
Payment summary / loss settlement worksheet	Breakdown of ACV, depreciation, deductible, net payment

If you only received a 1-page summary letter, demand the full Xactimate detail. § 627.7142 entitles you. Don't proceed with rebuttal until you have the line items.

6.1.2 The summary page — what to read first

The summary typically shows:

Replacement Cost Value (RCV):   $42,500.00
Less: Depreciation:             ($8,200.00)
Actual Cash Value (ACV):        $34,300.00
Less: Deductible:               ($2,500.00)
Net Claim Payment:              $31,800.00

Plus: ACV/RCV indicator, deductible type (AOP/Hurricane), policy limit usage, sub-limits applied.

Quick checks on the summary

Check	What to verify
Deductible type	Hurricane vs AOP — match to your loss event
Deductible amount	Verify $ matches dec page (especially % hurricane deductible math)
Depreciation amount	Sanity-check vs. reasonable rates for items
RCV total	Compare to your contractor's estimate
Policy limit usage	If approaching limit, may need supplement strategy
ACV vs RCV indicator	Does this match your policy?

6.1.3 The estimate body — line by line

Each room in the Xactimate has its own section. Within each room:

Room: Master Bathroom
Dimensions: 12' x 8' x 9'h  =  96 sf | 60 lf walls | 96 sf ceiling

Item                                Qty   Unit  Price    Total    Depr   ACV
1. Tear out drywall - water damage  120   sf    $1.10    $132.00  $0     $132
2. R&R drywall - 1/2"               120   sf    $3.42    $410.40  $40    $370
3. Paint walls + ceiling             216   sf    $0.78    $168.48  $20    $148
4. R&R baseboard                     30    lf    $5.65    $169.50  $15    $154
5. R&R tile floor                    96    sf    $9.20    $883.20  $90    $793
... etc
                                  Room subtotal: $1,763.58
                                  Room w/ O&P:   $2,116.30

What to verify in each line

Field	Check
Description	Right scope? (drywall, not just paint?)
Qty	Match your measurements?
Unit price	Reasonable for FL? Match your contractor?
Total	Math: Qty × Unit Price
Depr	Reasonable rate? (Labor shouldn't be depreciated in most cases)
ACV	Total - Depr = ACV

Common errors to flag

Missing rooms or surfaces
Quantities lower than reality
Unit prices below FLMI database
Excessive depreciation (especially on labor)
Items missing from rooms (no fan, no detector, no fixtures)
"Repair" instead of "R&R" where replacement is needed

6.1.4 Overhead & Profit (O&P)

Look at the bottom of each room or the summary for Overhead and Profit lines.

Standard: 10% Overhead + 10% Profit = 20% on top of trade work, when a general contractor is reasonably required.

The 3-Trades Rule (industry standard, not statute): if 3+ trades involved (e.g., plumber + drywall + paint + tile), GC is reasonably required → O&P should be added.

If carrier's estimate doesn't include O&P and 3+ trades are needed: rebuttal point.

Detail in Module 6.5.

6.1.5 The depreciation section

For each line, the carrier may apply depreciation. Total depreciation = the gap between RCV and ACV.

What's typically depreciated

Materials (drywall, paint, tile, cabinets, fixtures)
Some labor (carrier-dependent — some say no, some say yes)
Items w/ defined useful lives (roofs, HVAC, appliances)

What should NOT be depreciated

Mitigation costs (emergency tarp, drying — current cost, not depreciable)
Removal/disposal (current labor cost)
Code-required upgrades (paid under O&L, not depreciated)
Labor in many jurisdictions (no "old labor" — current cost applies)

Spotting depreciation errors

Common errors:

Compounding depreciation (age + condition both deducted)
Excessive useful life (claiming 50-year life on 20-year-life materials)
Depreciating labor when policy/case law says you shouldn't
Depreciating non-depreciable items (current-cost services)

If RCV is $42,500 and ACV is $20,000, that's 53% depreciation — investigate.

6.1.6 Engineering / expert reports

For complex claims, the carrier may hire a structural engineer, plumber, roofer, or other expert. Their report often controls causation arguments.

What to look for in a carrier expert report

Date of inspection — was it timely?
Scope of inspection — did they actually inspect everything, or only what they were sent to look at?
Methodology — visual only? Moisture readings? Destructive testing?
Conclusions — sudden vs gradual? Storm vs wear? Coverage vs exclusion?
Internal inconsistencies — does the report contradict itself?

Counter-strategy

Get your own expert if causation matters. Independent engineer/roofer reports often produce different conclusions.

If your expert disagrees with the carrier's expert: written rebuttal, point-by-point, with your expert's report attached.

In some cases: Examination of the expert during litigation reveals the report was written for the carrier (industry term: "hired gun"). But that's litigation territory.

6.1.7 The coverage decision letter — read carefully

The cover letter from the carrier states:

Coverage decision (approve / partially approve / deny)
Reasons for any partial approval / denial
Specific policy provisions cited
Next steps or required actions

Critical: read the cited policy provisions

If the carrier denies based on "wear and tear" exclusion — pull your policy and read that exclusion. Does it actually apply? What's the specific language?

If they deny based on a sub-limit being exhausted — verify the math.

If they deny based on "no covered cause of loss" — the burden is on the carrier to show what caused the loss is excluded. Don't accept conclusions; demand reasoning.

6.1.8 The Reservation of Rights letter — different beast

Sometimes accompanying the estimate: a Reservation of Rights (ROR) letter.

ROR = carrier saying "we're processing your claim, but reserving the right to deny later based on specific issues."

ROR is a serious signal. Do not handle a claim with an open ROR alone. Get a public adjuster or attorney involved.

Detail in Module 7.4.

6.1.9 Action steps

When the estimate arrives, demand the full Xactimate detail if not provided.
Print or open it side-by-side with your scope (Module 5.1).
Verify summary math — deductibles, depreciation, totals.
Mark every missing or under-quantified line item — these become rebuttal points.
Read the coverage decision letter in detail. Know what the carrier is saying.
Pull your policy for any cited provision. Verify it actually applies.

Next: 6.2 Identifying Missing Scope.

Educational. Not legal advice. Specific carrier estimating practices and depreciation methodology vary. Verify against your specific policy and current Florida law.