When your home is damaged and you're dealing with insurance, you're not shopping for the lowest bidder. You're building a case. And that case starts with something called a scope of work, not a bid.

In this post, we’ll break down why insurance claims are different from contractor estimates—and how understanding that can mean thousands of dollars more in your pocket.

What Is a Scope of Work?

A scope is a detailed breakdown of everything it will take to restore your property to pre-loss condition.

In most cases, this scope is built using Xactimate—an estimating platform used by almost every major insurance carrier, restoration contractor, and adjuster.

Xactimate: The Industry Standard (but Not a Hard Cap)

Xactimate updates its pricing monthly by ZIP code, meaning it reflects average labor, material, and equipment costs in your area.

But here’s the catch:

• Xactimate doesn't always include everything you need

• It doesn't automatically cover unique or custom finishes

• Some items don’t even exist in the database

This is why a contractor’s job isn’t just to “match” a price—it’s to document what’s actually required to restore the home correctly.

Why You Don’t Want a Low Bid

Getting a lower price doesn’t help your claim—it hurts it.
If a contractor agrees to do the work for less, your insurance company may now see that as the new baseline for future estimates.

The right contractor doesn’t undercut the claim—they build it correctly.

When and How You Can Go Above Xactimate

Xactimate is the starting point—but not the ceiling.
You can go above it if:

• The standard line item is missing something important

• Labor or material pricing in your area has changed faster than Xactimate updates

• You document everything with clear notes, photos, and supporting estimates

Final Thoughts: Stop Thinking in Bids—Start Thinking in Claims

This isn’t a race to the bottom. It’s a process of documentation and negotiation.

If your contractor doesn't understand how to build a solid scope—or worse, they're willing to cut corners just to "win the job"—you’re the one who pays the price.

Need help reviewing your scope or building a proper one?
Contact PL Builders today (951)692-7688 and get a second opinion that protects your home—and your settlement.