After damage to your home, an insurance claim can feel confusing and overwhelming. The language is dense, the numbers are hard to follow, and there is a lot riding on them. This guide puts a few key terms in plain English so you know what you are reading.

1. Your insurance estimate

When your insurance company looks at the damage, they usually send an estimate listing the repair work and costs they have included. It is the starting point for the repair conversation.

Estimates are long, and it can be hard to tell what is in them. Sometimes a step is covered inside another line item. Sometimes a step is not listed at all and is worth asking about. Reading the estimate closely, line by line, is the first thing to do.

2. Xactimate

Xactimate is estimating software that many insurance companies use to price repairs, from materials to labor. If your adjuster sent you pages of codes and abbreviations, that is probably where they came from.

It helps to know the software exists, because it explains why estimates are organized the way they are. The software is only as complete as the information put into it, which brings us to scope.

3. Scope of work

The scope of work is the list of tasks, materials, and steps needed to repair your home to its condition before the loss. A complete scope matters because the estimate is built from it.

For example, an estimate might include replacing damaged kitchen cabinets and leave you wondering about the electrical work to reconnect outlets, or the painting that follows. These are good questions to ask your adjuster. The answer may be that the work is already included somewhere else in the estimate.

4. Overhead and profit (O&P)

Overhead and profit (O&P) is a charge a general contractor adds to coordinate a repair that involves several trades, such as plumbing, electrical, and painting. Whether O&P applies to your claim depends on the job and your policy, so it is a fair question to ask your adjuster.

  • Overhead: the contractor's costs of running the work, such as office, administration, insurance, and vehicles.

  • Profit: what the contractor earns for managing the work and taking on its risk.

5. Putting it together

Estimates, Xactimate, scope of work, and O&P are all parts of the same picture. Knowing the terms makes it easier to read your estimate, ask clear questions, and keep notes on the answers.

If you would like a second pair of eyes, an independent consultant can read your estimate and give you written findings and practical questions to ask. Property Loss Pro does not negotiate as a public adjuster, give legal advice, or act as a law firm. You stay in charge of the conversation with your adjuster. Nothing in this article is legal advice, and no outcome is promised.