Your carrier's revised estimate just came in lower than your number. Same roof. Same scope. Same line items. But the labor line is suddenly cheaper — and nobody changed the materials.
Check the Pricing tile before you call. The estimate likely moved off the standard Restoration/Remodel/Service setting onto something new. Since early 2026, Xactimate has carried a third labor efficiency tier. Verisk calls it Large Restoration/Remodel. It quietly reprices labor on the kind of jobs roofers do every day.
I'm Chaz Jaco, founder of ESXPress and a licensed Xactimate user. I spend my days turning carrier scope PDFs into Xactimate ESX files and checking every line against the catalog. This is what the new tier actually does, which trades it hits hardest, and how to push back with data instead of opinion.
Key Insight: The new tier does not touch equipment lines. It moves labor lines — and it moves them a lot. Published testing against Verisk's own Xactanalysis scopes shows drywall down 10.3%, carpet re-lay down 4.9%, and water mitigation down 3.1% at the new tier, with zero changes beyond the dropdown. Roofing is a labor-heavy trade. Plan for the high-impact end of that range, not the low.
Two Labor Models Just Became Three
Since Xactimate version 2002, there were two labor productivity models:
- Restoration/Remodel/Service — the default for insurance repair work. Occupied structures, coordinated deliveries, drive time, material pickup, and the productivity loss of tying new work into existing finished surfaces.
- New Construction — now relabeled Total Rebuild or Similar. Open sites, unoccupied structures, unrestricted staging, maximum efficiency.
The new Large Restoration/Remodel setting sits between them. Verisk describes it as appropriate for larger restoration or remodel jobs that are easily accessible, separated from adjacent finished areas, where the site is typically not occupied and deliveries can be scheduled with minimal obstacles.
Two practical details matter:
- It is included in price lists starting with the January 2026 publication.
- It requires Xactimate 2026.2.1000.1 or later, released March 10, 2026.
You pick it the same place you always picked a model: the Pricing tile, on the Parameters tab. One dropdown click and every labor line in the estimate re-prices.
What the New Setting Does to Real Estimates
In June 2026, C&R Magazine published independent testing of the new tier. The test took three baskets of goods from Verisk's own Xactanalysis industry trend reports and priced each under all three settings. Nothing changed but the dropdown.
The results are not a single number. They are a spread:
| Scope basket (Xactanalysis) | Large Restoration/Remodel | Total Rebuild |
|---|---|---|
| Drywall — DRY 1/2 hang, tape, float (labor stand-in) | −10.3% | −25.9% |
| Carpet re-lay basket | −4.9% | −11.5% |
| Water mitigation — full basket | −3.1% | −8.9% |
| Water mitigation — labor-only lines | −5.6% | −16.0% |
Change vs. the Restoration/Remodel/Service baseline, before tax. Source: C&R Magazine, June 2026 (Pivot My Biz testing, Xactanalysis scopes).
The water mitigation basket is the tell. Roughly 44% of it is equipment and service — dehumidifiers, air movers, monitoring hours — and those lines carry no contractor-labor assumption at all. They do not move under any setting. Strip them out and the basket's labor-only lines fall 5.6% at the new tier and 16% at Total Rebuild.
Why does drywall fall so hard? Because drywall is nearly pure labor. Xactimate builds non-productive minutes into a technician's eight-hour day: planning, drive time, material pickup, breaks, set-up and clean-up, and an allowance for working in a restoration environment. The published minutes explain the moves exactly:
- Drywall at the standard setting: 200 non-productive minutes, 280 productive.
- At the new tier: 155 non-productive, 325 productive.
- At Total Rebuild: 100 non-productive, 430 productive.
At the new tier, the set-up and clean-up allowance is the exact arithmetic midpoint of the other two settings — to the half-minute — and the restoration-environment allowance is cut exactly in half. On drywall that allowance drops from 75 minutes to 37.5. Drive time does not move at all: a full 60 minutes in both restoration settings. More of the paid day is productive, so the labor in a square foot of drywall costs about 14% less. The blended line — roughly a quarter of it is material — lands near 10%. That is exactly what the test showed.
There is a transparency problem buried here. Verisk publishes the supporting-event minutes, but it does not publish production rates — how much work a unit of labor produces in an hour. In the test market, Verisk's published drywall hourly rate is $185.24. About 30% is wage, 10% is burden, and 60% is overhead. When market wages rise, the flexible component absorbs it. The rate can track the market while the productivity assumption underneath never moves — and nobody on either side of the file can see it.
Roofing Sits on the High-Impact End
Verisk's published materials split trades into three bands under the new tier:
| Band | Trades | Productivity reduction (points) |
|---|---|---|
| High impact | Drywall, framing, doors, demolition, complex flooring | 7.8–9.4 |
| Moderate | General flooring, appliances, insulation, general labor, lighting, finish plumbing | 4.2–4.7 |
| Low | Cleaning, content work, finish carpentry, hazmat remediation | 2.6–3.7 |
Roofing is not on the published list. But the pattern is consistent: the trades that move the most are the trades where labor is most of the line. A re-roof is mostly labor hours — tear-off, underlayment, shingle install, flashing, ridge work. RFG line items carry a heavy labor component on almost every code. Plan with the drywall end of the range, not the water-mitigation end.
And composition matters more than total dollars. Two estimates with identical value and different trade mixes will move differently. A drywall-heavy fire rebuild absorbs roughly 3.6 times more compression than a finish-carpentry-heavy interior loss of the same value. The aggregate figure you hear quoted — "5 to 10 percent" — is misleading. What matters is which trades your hours are in.
The Fight Over the Middle Tier
This did not land quietly. On April 28, 2026, the Restoration Industry Association published a white paper: Large-Loss Labor Efficiencies, the Definition Gap, and the Risk of Misapplication. Its argument: the industry has no shared definition of a large loss. Triggers range from a $10,000 carrier-handling threshold to FEMA capability tiers at $250,000, $500,000, and $1,000,000 or more. The RIA proposes a $250,000 to $500,000 minimum dollar threshold before the new tier can be applied. It is equally clear the tier should be the exception, not the norm — applied at the trade or phase level where conditions support it, with a right to rebut model selection using occupancy, access, phasing, and market evidence.
There is a serious counter-argument to the dollar threshold. Geography moves the math: a $250,000 job in Boston is not the same scope as a $250,000 job in West Virginia. No other estimating platform — RSMeans, Craftsman — uses dollar volume as a productivity trigger. And the trade data contradicts the premise: a $400,000 finish-carpentry job does not get more efficient because it crossed a line. Efficiency comes from conditions and repetition, not from the estimate total.
Know the legal backdrop, too. In March 2025, the U.S. District Court for the Middle District of Pennsylvania ruled in Belotti v. State Farm Fire & Casualty Co. that insurance policies do not require any specific Xactimate labor efficiency setting. The question is whether the payout covers the repair — not which dropdown produced it. The burden of proving the estimate is insufficient falls on the party challenging it. That makes the defense operational, not legal: the contractor with documented site conditions, production data, and side-by-side comparisons wins the conversation.
Six Things to Do Before an Adjuster Asks
The call is coming. Carriers and TPAs are already working this setting into file review. Be ready before the file lands:
- Know your numbers. Take representative jobs — mitigation, reconstruction, roofing — and price them under both settings. Document the dollar and percentage impact, and note how it varies by trade mix. Company-specific numbers beat industry averages in a negotiation.
- Run a site-conditions check. Six categories: occupancy during work, access and mobilization, trade fragmentation, condition matching and tie-ins, environmental conditions, and oversight burden. Any one present is a signal to verify with production data or sub bids before agreeing to a higher tier.
- Segment by scope complexity, not dollars. Damage type, market vertical, occupancy status, access, and labor-hour share by trade. Dollar volume is not a labor-efficiency signal.
- Validate with your own history. Pull last year's projects. Where margin beat target, ask why — genuine efficiency, or better scope management and procurement? That evidence works both ways: it shows where you will accept the tier, and where you will not.
- Build collateral. A one-page position statement, side-by-side estimate comparisons showing the tier's dollar impact on your project types, a customized site-conditions list, and sub-contractor bids that substantiate actual production cost.
- Train your team. Every estimator and PM who talks to adjusters needs the framing: we analyzed this project and the conditions on the ground, and here is why the standard setting most accurately reflects this scope. A shared pursuit of accuracy, backed by data.
What This Means When the Scope Arrives as a PDF
Here is where the ESX side matters. The labor efficiency setting does not live inside the .esx file. It is an estimate-level setting in the Pricing tile. When you import a converted ESX, the line items, CAT/SEL codes, quantities, and prices come in as built — the tier is applied on top, at the estimate level.
So after any import, ours or anyone's, do three things:
- Open the Pricing tile and confirm which labor efficiency tier the estimate is on. If it is Large Restoration/Remodel and your site conditions do not match, that is a documented rebuttal, not a vibe.
- Check the labor share of the job. Equipment-heavy mitigation moves less; labor-heavy roof work moves more. Price the same scope under both settings so you know the delta before the adjuster names it.
- Keep the scope complete. The number you negotiate from is only as good as the line items under it. Missing tear-off, missing ice-and-water shield, missing code upgrades — those cut far deeper than the tier does, and they are recoverable.
That last part is exactly what ESXPress does: PDF scope to Xactimate ESX in about two minutes, with every line mapped to a real Xactimate code and priced against the current catalog. Unresolved lines are flagged, never invented. You still run the labor tier conversation — but you fight it from a complete, accurate scope.
FAQ
What is the Large Restoration/Remodel labor efficiency setting in Xactimate?
A third labor productivity tier, live in Xactimate since early 2026. It sits between Restoration/Remodel/Service and Total Rebuild (formerly New Construction) for larger jobs where the site is accessible and unoccupied. It ships with price lists published January 2026 or later and needs Xactimate 2026.2.1000.1+ (released March 10, 2026).
How much does the new setting cut labor pricing?
It depends on trade mix, not job size. Published tests against Xactanalysis scopes: drywall down 10.3%, carpet re-lay down 4.9%, water mitigation down 3.1% (labor-only lines 5.6%). High-impact trades — drywall, framing, doors, demolition, complex flooring — see 7.8 to 9.4 points of productivity reduction.
Should I accept the Large Restoration/Remodel setting when an adjuster applies it?
Not automatically. The RIA white paper (April 2026) says the tier is the exception, not the norm, and proposes a $250,000–$500,000 threshold with a right to rebut using occupancy, access, phasing, and market evidence. Verify the setting matches your site conditions, then respond with data.
Does an ESX file carry the labor efficiency setting?
No. The tier is an estimate-level setting in the Pricing tile on the Parameters tab. An ESX file carries line items, codes, quantities, and prices. After any import, open the Pricing tile and confirm which tier the estimate is on.
What was Belotti v. State Farm?
A March 2025 federal ruling (Middle District of Pennsylvania) holding that insurance policies do not require any specific Xactimate labor efficiency setting. The key issue is whether the payout covers the repair. The burden of proving insufficiency falls on the party challenging the estimate — so bring operational evidence, not arguments.
Bottom Line
The new tier is real, it is shipping, and it re-prices labor on labor-heavy trades. It is not a large-loss problem — it is a trade-mix and site-conditions problem with large-loss optics. Roofers who know their numbers, document conditions, and keep scopes complete will protect their margins. Roofers who shrug will give back five to ten points on every affected file.
Start with the part you control: a complete, accurate, import-ready scope. Convert your next carrier PDF to Xactimate ESX with ESXPress — free tier, no card required.