Verisk adds a third Xactimate labor-efficiency model
Xactimate moved from two labor-efficiency models to three, adding a "Large Restoration/Remodel" tier meant to bridge service-level work and full rebuilds.
Xactimate moved from two labor-efficiency models to three, adding a "Large Restoration/Remodel" tier meant to bridge service-level work and full rebuilds. It lands on top of the long-running dispute over carriers using the "new construction" setting to lower payouts; courts have mostly sided with carriers that no specific setting is contractually required.
FORVerisk finally gave us a setting that matches how big restoration jobs actually run, so use it and stop leaving labor on the table.
AGAINSTA third setting is just a third thing the desk adjuster can downgrade you on, and now you have to prove which one fits before you even argue the scope.
Consensus vs. contrarianEveryone's framing this as Verisk "listening to restorers." The sharper read: more settings means more discretion, and discretion always flows to the party writing the check. The operator who builds a one-page "why this labor tier" justification into their estimate package turns the new setting into leverage instead of a new loss.
Carriers are circulating endorsements that effectively tell homeowners that hiring a public adjuster could cost them coverage. Merlin frames it as a coordinated "quiet war" on the policyholder-advocacy side of a claim.
FORStay in your lane, do clean documentation, and let the policy speak so you never need to lean on a PA in the first place.
AGAINSTWhen the carrier writes language to punish homeowners for getting help, that tells you exactly how fair they plan to be on your invoice.
Consensus vs. contrarianThe advocacy crowd is calling it a war on PAs. The contrarian operator angle: this isn't about PAs, it's a test balloon for narrowing who gets to challenge a number, and contractors are the next balloon. Get loud now while it's still "their" fight.
A retired Allstate claim manager testified the carrier acted in bad faith for refusing to pay overhead and profit, and the dispute over a roughly $33K invoice settled for $335K. It sits inside the broader O&P fight, where carriers strip O&P by narrowly counting "three or more trades."
FORDocument that you coordinated the trades, managed the permits, and ran the job, and O&P is yours no matter how the desk counts trades.
AGAINSTOne contractor got a 10x settlement after years of fighting, which tells you the system still makes you sue to get paid what the estimate already owed you.
Consensus vs. contrarianEveryone reads this as a contractor win. The smarter take: a $335K settlement on a $33K bill is not a win, it's proof the cost of denial is so low for carriers that they'll keep doing it. The win is a workflow that makes O&P undeniable on page one, not a lawsuit three years later.
A court reversed a State Farm water-damage denial and limited the carrier's "genuine dispute" defense, which carriers use to dodge bad-faith exposure when they claim a denial was merely a reasonable disagreement.
FORCourts are tightening the screws on lazy denials, so write the claim clean and the law is moving your way.
AGAINSTIt took a lawsuit and an appeal to undo one bad water denial, so don't bank your cash flow on the courts saving you.
Consensus vs. contrarianConsensus: good precedent for policyholders. Contrarian: precedent only matters to operators who can afford to litigate, which most mid-size shops can't, so the real lever is documentation that never lets it become a "dispute."
California is seeking millions in penalties against State Farm over alleged claims-handling violations tied to the January 2025 LA wildfires, the costliest wildfire event in Swiss Re's loss database at roughly $40B insured.
FORWhen the state itself says a carrier mishandled fire claims, your supplement on that same job just got a lot more credible.
AGAINSTA fine to the state doesn't put a dime back in the contractor's pocket on the jobs that already got slow-walked.
Consensus vs. contrarianConsensus: accountability. Contrarian: penalties are a cost of doing business priced into the model, and they land after the rebuilds are done, so don't mistake a headline fine for leverage on your open files.
Carrier-side attorneys turned a roughly $1M hail claim into a nearly $2M suit alleging contractor interference with the claim.
FORKnow exactly where the line is between advocating for your customer and "adjusting," and you make yourself lawsuit-proof.
AGAINSTCarriers inventing "contractor interference" suits is just intimidation dressed up as litigation, designed to make you flinch on supplements.
Consensus vs. contrarianThe contrarian, must-own take: the carriers are building a legal vocabulary to criminalize normal contractor advocacy, and the operators who learn that vocabulary first will be the ones still standing.
Industry-watchers now peg the field at ~15,000 firms shrinking to under 10,000 by 2030, with multiples running 3x-11x and named platform deals continuing (Montera-backed Midwest Remediation, American Restoration trading PE-to-PE). RIA responded in Feb 2026 by launching a "Voice of the Independent" task force whose advisory board is explicitly limited to firms that are neither franchised nor PE-backed.
FORThe roll-up is proof your business is worth something, so build it to be acquirable even if you never sell.
AGAINSTEvery shop that sells to PE hands a competitor more pricing power over your carriers and your labor pool, so staying independent is a competitive act, not just a lifestyle choice.
Consensus vs. contrarianConsensus: consolidation is inevitable, take the multiple. Contrarian worth owning: the independents who systematize like a platform but stay independent capture the platform's margins without the platform's mandate, and that's the most valuable seat in the industry over the next five years.
Starting May 29, 2026, Mercury requires qualifying smart water leak-detection devices on certain new standard HO-3 policies. Carrier partnerships with Phyn and Moen Flo are expanding, and Phyn cites a 99% reduction in non-weather water claims across a 13,500-home study.
FORGet ahead of it: sell and install the shutoff tech yourself so you own the customer relationship before the loss instead of waiting for one.
AGAINSTCarriers aren't mandating leak detection to help homeowners, they're doing it to erase the water claims you depend on, and they're not sharing the savings with you.
Consensus vs. contrarianEveryone treats smart-water as a homeowner-convenience story. The operator angle nobody's saying out loud: this is carriers quietly shrinking the water-mitigation market, and the smart shops will pivot to selling prevention and monitoring before the mitigation volume actually dips.
Construction needs ~349,000 net new workers in 2026 just to hold steady. Immigrants are 34% of the construction workforce and 60%+ in drywall, roofing, and plaster. A joint AGC/NCCER survey found 28% of firms hit by ICE-related disruption in the prior six months, with timelines stretching.
FORLock in your crews and subs now with better pay and real training, because the shops that hoard skilled labor will own the CAT seasons.
AGAINSTCarriers are still pricing labor like it's 2019 while ICE raids gut the trades, so the Xactimate labor number is more disconnected from reality than ever.
Consensus vs. contrarianConsensus: labor's tight, pay more. Contrarian operator move: the labor crunch is your single best argument for higher labor rates in the estimate, so document local wage reality and make the carrier's stale labor number the fight.
NFIP authority lapses at 11:59pm Sept 30, 2026 unless reauthorized. H.R. 5484 (NFIP-RE Act of 2025) would cap annual premium increases and add affordability and mitigation provisions. Separately, Moody's pegs potential uninsured flood losses at $375B from a 1-in-100-year event.
FORA reform that caps premium hikes keeps more homeowners insured, which means more covered losses and fewer fights over who pays.
AGAINSTCongress has limped NFIP along on short-term extensions for years, so build your flood-season cash flow assuming another lapse, not a fix.
Consensus vs. contrarianContrarian, dated take to own now: the smart shop treats the Sept 30 cliff as a marketing calendar, educating homeowners on coverage gaps before the deadline instead of reacting after the next flood.
California unveiled legislation (Lara/Calderon) to overhaul the FAIR Plan as private carriers keep pulling back; nonrenewals outnumbered new policies in 46 of 58 counties. Reforms include faster claim payouts, mitigation grants, and stronger FAIR Plan financial safeguards.
FOR"Faster claim payouts" written into law is exactly the cash-flow relief restorers have begged for, so push to make it real.
AGAINSTA bigger FAIR Plan just means more underinsured homes and slower checks, and reform language rarely survives contact with a real claim.
Consensus vs. contrarianContrarian: the carrier retreat isn't a California problem, it's the preview, so build FAIR-Plan and underinsurance workflows now before your state's market does the same thing.
IICRC is revising S700 (fire and smoke) to fold in wildfire cleaning methods, with a member call that closed Jan 31; S520 (mold) and S700 drafts went through public comment that closed Feb 6.
FORFinally a fire standard that addresses wildfire soot and ash instead of pretending it's the same as a kitchen fire, so get your crews trained to it early.
AGAINSTA standard written partly by the people who profit from the work isn't automatically the standard that protects the operator, so read the draft before you cheer.
Consensus vs. contrarianContrarian: the operators who actually submit comments shape the standard they'll be judged by, and almost nobody does, so the few who engage punch way above their weight.
OSHA extended its Heat National Emphasis Program for five more years (April 10, 2026) on top of a proposed federal heat standard requiring written plans and acclimatization. Separately, EPA's tightened RRP lead rule began enforcing penalties Jan 12, 2026, now sweeping in property managers, with fines up to $40K per violation.
FORGet your heat plan and lead-safe cert squared away now and you turn compliance into a sales point with carriers and big property managers.
AGAINSTMore paperwork and more ways to get fined, dumped on small shops that are already short on crews and time.
Consensus vs. contrarianContrarian: RRP enforcement on property managers means your commercial PM clients now need a certified partner, so the rule that looks like a cost is actually a referral wedge.
Distributors are circulating 2026 manufacturer price-increase notices, with tariff pressure (a 10% baseline plus steep China-specific rates) feeding into dehumidifier, air-mover, and component costs.
FORBuy and standardize your fleet now before the next notice, and lock pricing while you can.
AGAINSTTariffs raise your real costs today but the price list won't catch up for months, so you eat the gap on every job in between.
Consensus vs. contrarianContrarian: track your actual equipment and consumable costs by month and use the documented increase to push line-item updates, instead of absorbing tariff inflation silently.
Trade press is raising the failure mode of AI estimating and scoping tools (a wrong AI call on materials or scope causing real damage), even as tools like Rebuild pitch insurance-compliant estimates in 90 seconds via an AI voice assistant.
FORAI that writes a compliant estimate in two minutes is the biggest labor gain restoration has seen, so adopt it and out-run the shops still typing line items.
AGAINSTWhen the AI scopes it wrong, you own the callback and the carrier owns the "you signed off on it," so speed without a human check is a trap.
Consensus vs. contrarianContrarian: the winning move isn't "AI vs. no AI," it's AI plus a named human reviewer on every scope, because the shops that skip the review will hand the carriers a new reason to deny.
NOAA predicts a below-normal 2026 Atlantic hurricane season (Cleanfax, 2026-05-26, cleanfax.com/noaa-predicts-below-normal-2026…). Read it as a softer CAT-demand year, which makes the labor and consolidation pressures bite harder because there's less storm work to float everyone.
NFIP Sept 30 deadline is the single biggest dated event on the horizon.
RIA Convention, April 27-29, Savannah (80th anniversary), agenda will signal the association's advocacy priorities; worth watching the Voice of the Independent track.
Mercury's May 29 leak-detection mandate is the first of what's likely a wave of carrier device requirements.
The take
Your water jobs are the engine. The slow leak under the sink, the supply line that let go while they were at work, the burst pipe in February. That's the volume that keeps your trucks moving and your crews paid. So you should probably know that on May 29, one carrier started requiring shutoff devices on new policies, and they're not the last one.
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