What you aren’t told about Xactimate for contractors on non-program work
Sep 20, 2021For a long time, a dated mindset has influenced the restoration industry. It suggests that insurance companies set the prices and work scope for contractors. This belief is wrong. It hurts the freedom and profits of restoration businesses. At Restoration Advisers, we advocate for a shift in view. Contractors should focus on their contracts. Their contracts are with mutual clients (insured homeowners). They should focus on these contracts over negotiations with insurance companies. Some contractors may do "program work" to keep crews busy. But they must keep a healthy balance. We recommend a 90/10 split of organic to program work. We advocate that you build most of your business through strong referral networks. Or, through direct client relationships. It is not built on low-margin insurance projects.
Many restoration contractors rely heavily on Xactware. They use it to help them figure out what to charge. But using only historical data can be misleading. It often fails to reflect current market conditions and pricing trends. It is important to realize that Xactware was not meant to be a tool for insurance companies. They should not use it to dictate prices or scope of work to contractors. In fact, the president of Xactware has confirmed that the software is designed to provide data, not to control pricing or job scope.
To help contractors understand the Terms & Conditions of Xactimate and its pricing, we have developed an e-course titled "Xactimate: What you are NOT told about pricing." You can find out more about it here. This course provides valuable resources, downloads, and collaboration tools to help you uncover the hidden truths about Xactimate and its pricing. By understanding the origin of pricing data and learning how to contribute to its improvement, you can gain a competitive edge in the restoration industry. We also developed a comprehensive course on client onboarding processes. We help restoration businesses streamline their operations and avoid unnecessary confrontation with adjusters or other parties outside the scope of their client contracts.
By embracing a new approach to restoration work and prioritizing direct client relationships, you can build a successful and profitable business that is not reliant on insurance companies or their programs.
The restoration industry is plagued with a legacy philosophy that somehow insurance is in control of what you can and cannot charge, and how contractors must scope and perform work to get paid. They don't care that the restorer is the trained professional. A key component to providing safe and expert services to communities across the country. The thought process is that while you as the contractor have a contract with the mutual client (insured) that the insured is left out of the conversation and the contractor is obligated to work out the details with the insurance companies. This idea couldn’t be further from the truth. It should be noted that there are some cases where contractors have signed up for “program work”. As such, this conversation doesn’t apply. We urge contractors to keep program work to an absolute minimum. There are times when it makes sense to take this work to keep crews busy. It is generally low margin work. A good distribution of work from organic work vs program work is 90/10.
The restoration industry is ripe for disruption. We are seeing it all around us!
Restoration Advisers has long been teaching the industry methods to prepare for the changing landscape. We are constantly analyzing best practices for Restoprueners™️ to achieve their goals. By challenging the status quo we are creating a way for a new era of independence and profitability to be realized.
If you're tired of feeling trapped by the constraints of insurance-driven work and want to build a restoration business that puts your clients first while helping you achieve your goals, it's time to take action. Reach out to Restoration Advisers today to learn how we can help you implement the strategies discussed in this blog and unlock the freedom you've always dreamed of.
Don't let outdated philosophies and insurance company control hold you back any longer. Embrace the power of direct client relationships and watch your business soar to new heights. The future of restoration is here - let Restoration Advisers be your guide on this journey.
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