The Xactware company http://www.xactware.com/ , a subsudiary of the Insurance Services Office (ISO) http://www.iso.com/ markets an estimating application for the damage restoration industry called Xactimate. Xactware claims some 50-80% of the property claims settled by the insurance carriers are processed on the Xactimate platform. Xactimate is the 800 lb gorilla of the damage restoration industry.
Xactimate was origianlly developed by a contractor named James Loveland as a tool to assist contractors in writing accurate cost estimates and bids to complete work . Over the years, insurance carriers have seen Xactimate as a tool to collect data and use that data in an effort to standardize and to control the amounts paid to settle property damage claims. Xactware has been (willingly) metamorphized from a tool to assist contractors into a tool to allow insurers to manipulate pricing and claims settlement practices. The recent aquisition of Xactware from the Loveland family by the ISO removed any doubt about which side Xactware's bread was buttered on.
As time has passed , the effort by insurers, through their surrogate, Xactware, to represent the data collected and published as the "pricelist" has become increasingly widespread. While Xactware still publicly denies that they establish the price of services, they market their data as a "pricelist" and insurers increasingly and openly demand adherence to the pricing published by Xactware as a condition for entry into or continued operation by contractors in the marketplace.
The fact is, the data published by Xactware is highly suspect as it depends to a great deal on a function called feedback-which is overwhelmingly the submission of prices paid on settled claims by insurers and the prices charged by captive contractors who have agreed to use the "pricelists" published by Xactware. It is a self-fulfilling prophesy at best. It is price-fixing at worst.
The bulk of restoration contractors have just a willingly ridden along as this change took place, exchanging autonomy for convenience. This due in great part to the fact that a savvy operator of the software could manuever their way through the application and its pricing database to produce more than acceptable margins, with little concern of scrutiny.
Insurers , however, are data collection machines and increasingly look for opportunities to tighten control or to simply take control of all or portions of the scope and pricing in the claims process. The separate agreements by insurers to contract floor covering services, roofing services, etc. apart from the general restoration contractor's control (and markup) are examples of areas where insurers are moving from a traditional role as the funding agent to one historically within the purview of the restoration contractor.
The question is whether this trend is in the long-term interest of the property owner.
