Labor Cost - Insurance & Xactimate Glossary | CapOut
Labor Cost
Labor cost is the workforce component of every Xactimate line item, calculated per unit (per square for roofing, per square foot for siding, per linear foot for gutters). Labor rates are based on Verisk's regional pricing databases, which are updated monthly.
How Xactimate Prices the Work
Labor cost is the workforce component of every Xactimate line item, calculated per unit based on Verisk's regional pricing database (updated monthly), and it is one of the most supplementable elements on an insurance claim. Xactimate bundles labor into its unit prices - per square for roofing, per square foot for siding, per linear foot for gutters - but the labor component is viewable and adjustable separately within the estimate. These prices are pulled from Verisk's regional pricing database based on local market data.
The issue: Verisk's data can lag behind actual market conditions, especially after major storm events when labor demand spikes and subcontractor rates skyrocket.
When Xactimate Labor Pricing Falls Short
After a major hail event or hurricane, labor rates in the affected market can spike significantly above Xactimate's database pricing. When every roofing crew within 100 miles is booked and subcontractors are driving in from neighboring states, the market rate for labor jumps. Xactimate's monthly pricing update may not capture these surges in real time.
| Scenario | Xactimate Labor Rate | Actual Market Rate |
|---|---|---|
| Normal conditions | Matches market | Matches Xactimate |
| Post-storm (30 days) | May lag market | 10-30% above Xactimate |
| CAT event (60+ days) | Significantly below market | 20-50%+ above Xactimate |
This gap is a legitimate supplement argument. If you are paying crews more than what Xactimate allows, document it.
Building the Labor Cost Supplement
The carrier will not accept "labor costs are higher than Xactimate" as a supplement argument without proof. You need documentation that demonstrates the actual market rate exceeds the database pricing. Collect:
- Written quotes from at least two local subcontractors showing current labor rates
- Documentation of the storm event and its impact on local labor availability
- Screenshots of Xactimate's labor breakdown showing the database rate
- Any trade association data on regional labor rate increases
Present the supplement as a factual comparison: here is what Xactimate says, here is what the market actually costs, here is the documentation. The more specific and evidence-based your argument, the harder it is for the desk adjuster to reject.
Labor Cost Beyond the Shingle Field
Labor is not just roofing installation. Every trade involved in the repair has a labor component, and each one has its own supplement opportunity. Demolition labor, haul-off labor, painting labor, drywall labor - each is priced separately in Xactimate and each can lag behind market rates after a surge event. On complex claims with multiple trade categories, the cumulative labor cost gap can add thousands to the claim. Review the labor component of every line item, not just the roofing lines.
Frequently asked questions
How are labor costs determined in Xactimate?
Labor costs in Xactimate are based on regional pricing databases updated monthly by Verisk. Labor is included in the unit prices but can be viewed and adjusted separately. Costs are calculated per unit: per square for roofing, per square foot for siding, per linear foot for gutters.
Can you supplement for labor cost differences?
Yes. If you are in a market where labor rates have spiked - common after major storms when demand outstrips supply - the Xactimate pricing may lag behind actual market rates. This is a legitimate supplement argument when documented with local labor quotes.
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