Previously I discussed how Xactimate’s pricing is going down while national building material prices are going up. One theory I advanced was that insurance companies are the largest customers of Xactimate and therefore Xactware is simply giving its customers what they want.

However, the truth is much worse than simply that. Xactware is owned by the insurance industry. Xactware is a subsidiary of Verisk Analytics. Verisk was formed to be the parent company of the Insurance Services Office (ISO) which is an organization of which the readers of this blog should be well aware. If not, ISO is the company that has unified the insurance policy forms for the insurance industry and has slowly changed the forms to narrow coverages and increase exclusions. Verisk was a privately held company owned by insurance companies up until a 2009 initial public offering. While currently a publicly held company, Verisk’s main shareholders remain insurance carriers.

It is important for individual insureds to understand who is making the determinations on their claims. While the average insurance consumer understands that the insurance companies are making decisions concerning what needs to be repaired, they likely assume, incorrectly, that the prices included in the estimate are set by the market and not the insurance companies. In the end, check the prices in your estimates, if you are unsure about the prices, consult a public adjuster or attorney.