How to Reconcile Two Claim Estimates

Short answer: To reconcile two claim estimates, first make them comparable, then work through every difference. Align the parameters (price list, O&P, and tax). Match rooms by dimensions and contents rather than names. Compare line items and sort each difference as pricing, quantity, missing scope, or a duplicate. Decide how to handle each one, then produce a revised estimate and a variance report both parties can review.

A typical reconciliation

A contractor writes a $412,000 estimate on a two-story fire loss. The adjuster’s estimate comes back at $356,000. Both are Xactimate estimates for the same house. Neither PDF explains the $56,000.

The usual next step is two PDFs open on two monitors and a long afternoon. One large-loss estimator at a regional restoration firm described it this way: “One eye’s on one screen, and one eye’s on the other screen, and I’m just trying to see where’s the anomaly.” He calls the process “find the weasel.” Depending on the size of the gap, it takes “anywhere from half a day to multiple days.”

Most of that time is not spent on real disagreements. It is spent on differences that exist only because the two estimates were built differently. Reconciliation goes faster when you remove those first.

Why two estimates for the same loss rarely match

Two estimates on one claim is normal. A contractor, an adjuster, a public adjuster, a building consultant, or an appraiser may each write one. Each author inspects on a different day, measures with a different tool, and organizes the estimate the way they were trained to.

Some of the resulting differences are real: a disagreement about scope, quantity, or price. Many are structural. The same work is described, priced, or organized in a way that makes it look different. A good reconciliation separates the two kinds before anyone argues about either.

Why claim estimates aren’t apples to apples

These are the structural differences that make a line-by-line comparison misleading until they are resolved.

Price list, list type, O&P, and tax

Xactimate prices are keyed to a region and a date. If the two estimates use different price lists, every line item differs, even where scope is identical. The date itself is a judgment call. As one independent adjuster put it: “Is it date of loss? Is it date of estimate? Is it date of inspection?”

Price list type and labor efficiency matter just as much. A restoration price list and a new construction price list can differ by roughly 15 to 20% on the same scope, according to a senior large-loss estimator we spoke with. An estimating lead at a national restoration company called labor efficiency “a big one that can significantly change an estimate.”

Overhead and profit and sales tax are the last check. O&P is sometimes applied to some trades and not others, such as interior work but not roofing. Tax may be applied to materials only, to everything, or removed. Each choice moves the total without changing a single line of scope.

Room names, order, and groupings

Rooms rarely line up by name. “There’s a big debate whether you should call it an owner’s room, or an owner’s suite, or a master bedroom,” one estimator told us, “or you just misspell bedroom.” Rooms are also grouped differently. “I always connect closets and bedrooms,” said another. “A lot of adjusters don’t.”

When one estimate has Owner’s Suite with the closet included and the other has Master Bedroom and Master Closet as separate rooms, a room-by-room comparison shows a missing room and an inflated one. Neither is true.

Line item order, duplicates, and zero quantities

Estimators sequence line items differently: by trade, by order of operations, or bottom-up. “I resequenced the line items when I started, and then they resequenced the line items when they did it,” one estimator said. “We can’t go off of line item numbers.”

Two other structural problems hide in plain sight. A room or group may be duplicated. A line item may have been added with a zero quantity, so it appears in the estimate but prices nothing.

Dimensions and the Sketch

Quantities come from room dimensions, so a dimension difference flows into every line item in the room. Ceiling height is the most common one. “They use default 8-foot ceiling, and it could be 9 or 10-foot ceilings in those rooms,” a senior large-loss estimator said, “and that right there is enough to give you the difference between two scopes.” Two scans of the same house with different tools can also produce different Sketches. See why the Sketch matters.

How to reconcile two claim estimates, step by step

Both estimates should be in Xactimate, or a tool that reads them as estimates, with the project tree intact. A PDF hides the codes, dimensions, and structure you need for steps 2 and 3. If one estimate only exists as a PDF, convert it to ESX first and confirm the RCV matches the original.

Step 1: Align the parameters (price list, O&P, and tax)

Compare the estimate headers before any line items. Note the price list region and date, the price list type, labor efficiency, O&P, and tax settings in each.

Decide which settings both parties will use, or reprice one estimate to match the other. Some reviewers prefer to resolve the price list first. Others want to see the raw differences, then normalize. Either works, as long as you know which differences come from pricing settings and which come from scope.

Step 2: Map the rooms

List the rooms in each estimate side by side. Match them by dimensions, sub-areas, and the line items inside them, not by name. Expect some one-to-many matches, where one room in your estimate equals two in theirs.

Every room should end up matched, or flagged as present in only one estimate. A room in only one estimate is a real scope question. A room that only looks missing because of its name is not.

Step 3: Compare top-down: totals, then trade category, then room, then line item

Don’t start at line item one. Start where the money is.

1. Totals. Confirm the RCV gap after step 1. That is the amount you are reconciling.

2. Trade category. Compare category totals. A senior large-loss estimator described his first move: if the estimates are $100,000 and $80,000 and “I go to my drywall category and I’m at $14,000 and he’s at $8,000, I know we have a problem already right out of the gate just in drywall.”

3. Room. Within the categories that carry the gap, compare room totals. “We’re off by a thousand bucks,” one estimator said. “There’s $1,000 somewhere.”

4. Line item. Only now compare line items, in the rooms and categories that matter.

Sort each line-item difference into one type:

Step 4: Decide what’s worth resolving

Not every difference deserves the same attention. “If a claim is $500,000, we probably want to fight pretty hard for 1%,” one estimator said. “How hard do we want to fight for doorstops?”

For each difference, decide one of three things:

• Accept the other estimate’s line item.

• Keep your own, with documentation that supports it.

• Set aside as too small to discuss.

Duplicates, zero-quantity lines, and settings differences from step 1 are usually quick to accept or correct on both sides. Spend your time on the scope and quantity differences that carry the largest dollar amounts.

Step 5: Produce the revised estimate and variance report

The reconciliation ends with two deliverables.

• A revised estimate that reflects every accepted change. It becomes the working scope.

• A variance report that lists what is agreed, what is still in dispute, and the outstanding dollar amount, with support for each disputed item.

A senior large-loss estimator described the result he wants: “I agree to A, B, and C, but I won’t agree to D and E… Here’s new, revised scope that now becomes the scope.” Keep the report short and in your own format. A one- or two-page summary of the material differences gets read. A 60-page side-by-side does not.

Reconciling manually vs. with a tool

Manually. Two PDFs or two Xactimate projects, a spreadsheet, and the steps above. It works and costs nothing but time. On a large loss that is often a full day or more, and the room mapping and top-down comparison are where most of it goes.

General AI tools. Many estimators have tried dropping both PDFs into ChatGPT or a similar tool. They are a reasonable way to get a rough list of differences. They struggle with Xactimate’s column structure, sometimes miscalculate totals, and don’t know what a line item includes. An estimating lead at a national restoration company said the AI will flag a missing door casing “or the doorknob, even though in Xactimate that’s all included in the line item.” They also stop at a list. “It’ll produce a spreadsheet,” one estimator said, “but it’s not going to help you redo an estimate.”

A purpose-built tool. ClaimsFlow Estimate Reconciliation follows the five steps above. Upload both estimates as PDF or ESX. ClaimsFlow lines up the parameters (e.g. pricing, O&P, and tax) and proposes room matches for you to confirm. You review the differences, accept or keep each one, and download a revised ESX and a variance report you can send in your own format.

Checklist: what a thorough reconciliation should answer

• Are both estimates on the same price list, list type, and date?

• Are O&P and tax applied the same way, on the same trades?

• Does every room in one estimate map to a room, or rooms, in the other?

• Which trade categories account for most of the gap?

• Are there duplicated rooms or zero-quantity line items?

• Do room dimensions and ceiling heights match?

• Is each difference pricing, quantity, missing scope, a different item, or a duplicate?

• Which differences are large enough to be worth resolving?

• What is agreed, what is still disputed, and what is the outstanding variance?

Frequently asked questions

How can I reconcile two claim estimates?

Make the two estimates comparable, then resolve the real differences. Align the price list, O&P, and tax; map rooms by dimensions and contents; compare from totals down to line items; decide which differences are worth resolving; and produce a revised estimate plus a variance report showing what is agreed and what is still in dispute.

How do adjusters compare competing estimates?

Adjusters compare competing estimates the same way: normalize pricing settings first, match rooms, then work from category and room totals down to the line items that carry the gap. Many adjusters separate the result into an undisputed amount that can be paid and a short list of disputed items. As one IA firm principal put it: “Here is my undisputed… and then here are the disputes that we have.”

How do building consultants compare estimates for independent analysis?

Building consultants put both estimates in Xactimate with their structure intact, then classify each variance as scope, quantity, or pricing. The deliverable is usually a revised estimate plus a statement of the remaining variance and what support would resolve it. For the full review process, see how to analyze a contractor’s estimate in Xactimate.

Why is the adjuster’s estimate different from the contractor’s?

Usually a mix of structural and real differences. Structural differences come from price list, list type, O&P, tax, room naming, and line item order. Real differences come from scope, quantities, and material choices. Resolving the structural ones first often shrinks the gap that actually needs discussion.

How long does it take to reconcile two estimates?

On a residential loss with a small gap, an hour or two. On a large loss, estimators we spoke with described anywhere from half a day to several days. Most of that time goes to matching rooms and locating the line items that explain the gap.

Can ChatGPT compare two Xactimate estimates?

It can produce a rough list of differences from two PDFs. It often misreads Xactimate’s column structure, can miscalculate totals, and doesn’t know which components a line item includes. It also can’t produce a revised estimate. Verify anything it finds against the estimates themselves.

Spend the time on the real differences

Most of a reconciliation is spent making two estimates comparable. The part that matters is the handful of real differences in scope and quantity, and the conversation about them.

Upload both estimates, line them up, and leave with a revised ESX and a variance report. See how it works at Estimate Reconciliation. Your first 150 line items are free at claimsflow.io.

Related articles:

• How to Analyze a Contractor’s Estimate in Xactimate

• The PDF Is Not the Estimate: What Working From a PDF Really Costs

• How PDF to ESX Conversion Fixes Insurance Estimate Negotiation

• How to Convert a PDF to ESX for Xactimate

• Green Items: The Hidden Cost of Custom Line Items in PDF Estimates