What Insurance Wants To Pay Vs. What Is Actually Needed

The claims industry has made massive shifts in the last few years, all of which have eroded the already fragile relationship between insurance carriers and those responsible for repairing the homes of those who file an insurance claim. Meeting an adjuster at a home, walking through the inspection with them, coming to an agreed upon scope of work and going about your day was once the system most of us operated in.

We have allowed for non experts to dictate the scope of repairs to dictate what is and isnt needed when they have no business doing so.

The Rise and Fall of a Once-Functional System

There was a time when meeting an adjuster at a job site was a straightforward process. Contractors and adjusters would walk through the inspection together, discussing the damage and developing a mutually agreed-upon scope of work. There was respect for the expertise each party brought to the table. Contractors, with their hands-on experience and understanding of the repairs needed, would provide input, while adjusters, representing the carrier, would assess what was covered under the policy. The system worked because it was based on a shared understanding: contractors were the experts in their field, and adjusters respected that expertise.

But that system is now dead.

I'm not saying that adjusters were ever qualified to speak on the scope of repairs but once upon a time they had more knowledge about what was needed then they do now. Those days are far behind us. Now we experienced a revolving door of low skilled employees and Wardlaw adjusters,  upon peaking with them it's unclear whether they understand how to tie their shoes in the morning. Let alone what it takes to repair a home, following a property damage claim.

Weaponized incompetence is the nice way to describe the current system, fraud is the more honest term to use.

The Damage Done to Homeowners and Contractors

For contractors, this shift has been nothing short of maddening. Years of experience and practical knowledge are now sidelined in favor of systems and processes that view repairs as mere numbers on a spreadsheet. The resulting estimates are often inaccurate, incomplete, or unrealistic, leaving homeowners in the lurch and contractors forced to explain why they can’t complete the work for the amount an insurance company has allotted.

But the real losers in this shift are the policyholders—the homeowners who file a claim in their time of need. They are often presented with unclear estimates that don’t reflect the actual cost of repairs, or worse, lowball estimates that leave them scrambling to cover the difference. These homeowners turn to their contractors for guidance, only to be told that the true cost of repairs exceeds what the insurer is willing to pay based on aggregated data from software systems. What should be a straightforward process of making someone whole again becomes an unnecessary and frustrating battle.

The most troubling aspect of this shift is that it completely disregards the expertise contractors bring to the table. When did we allow ourselves to forget that contractors are the ones who actually do the work? They are the experts in assessing damage, recommending repairs, and executing those repairs. But in today’s landscape, contractors are treated as though their knowledge is secondary to the dictates of a software program—one that was never designed to understand the intricacies of each individual claim.

Instead of working together as partners to restore homes, contractors and insurance carriers are now at odds. The focus has shifted from ensuring quality work is done to ensuring the insurance company pays as little as possible—regardless of what the home actually needs.

A Broken System in Need of Repair

The current system is unsustainable. Contractors can’t continue to operate in an environment where their expertise is disregarded, and policyholders can’t be left to bear the burden of inaccurate estimates. We need to return to a system where contractors and adjusters work together, where trust and collaboration are the norms, not the exception.

Restoration contractors should provide expert opinions on necessary repairs, not have their decisions dictated by third-party software. Insurance companies, who aren’t experts in repairs, must step back and allow those who are qualified to assess the true scope of work.

The question we now face is simple: Will we continue down this path of eroding trust and cooperation, or will we return to a system that values the expertise of the very people responsible for restoring homes?

If the answer is the former, the already fragile relationship between contractors and insurance carriers will continue to crumble—at the expense of homeowners everywhere.

Reclaiming Control: What Needs to Change

To reclaim a system that works for everyone, we must first acknowledge the root cause of this erosion—control. Over the past few years, control has gradually shifted away from the experts who actually perform the repairs. Contractors, who have the knowledge, tools, and experience to determine what is necessary, are increasingly finding themselves sidelined by software-driven estimates and adjusters with limited understanding of the scope of repairs.

So, what needs to change?

1. Restore Trust in Contractor Expertise

The most straightforward solution is to restore faith in the expertise of contractors. They are the ones who understand the materials, time, and labor required to restore a property. When adjusters and carriers consult contractors early in the claims process, better estimates emerge. By respecting their experience, carriers and homeowners alike can make better-informed decisions about repairs.

2. Move Away from Overreliance on Estimating Software

While software tools like Xactimate and Symbility were designed to make the process smoother and more efficient, they were never intended to replace human judgment. It’s time to recognize that these tools are aids, not decision-makers. Their data should be used to support, not dictate, the decisions contractors and adjusters make in the field. No software can account for every unique damage situation, nor should it attempt to.

3. Establish Clear Communication with Homeowners

One of the biggest challenges in today’s claims environment is the lack of clarity that homeowners experience when receiving estimates. They’re often handed confusing, incomplete reports that don’t reflect what is truly needed to fix their home. Contractors must take the time to explain these discrepancies and educate homeowners on the reasons for the gap between an insurance estimate and the actual cost of repairs. However, this shouldn’t be the contractor’s burden alone—carriers should also commit to transparency, explaining exactly what their estimates cover and why.

The Consequences of Inaction

If the industry doesn’t change course, the consequences will be severe and far-reaching. We’re already seeing contractors leave the insurance repair industry because they can no longer operate in a system where their expertise is dismissed. As more contractors exit, fewer options remain for homeowners, leading to longer wait times, increased costs, and lower quality repairs.

The frustration between contractors and carriers will continue to grow, and that breakdown in trust will eventually impact policyholders who are the most vulnerable in this equation. Homeowners, who are already dealing with the emotional stress of a disaster, will face mounting financial pressure when the repairs they need aren’t fully covered by insurance. Worse yet, they may not understand why, leaving them with no choice but to pay out of pocket or accept subpar repairs.

On the other side, carriers will see their reputation further damaged. Dissatisfied homeowners will turn to social media, public reviews, and even litigation, creating long-term damage to insurance companies’ credibility. Instead of focusing on minimizing payouts, carriers should refocus on protecting their policyholders, restoring homes fully, and supporting the experts who carry out the work.

A Path Forward

There is hope for a better way. A future where contractors, carriers, and policyholders all operate in a system built on trust, collaboration, and mutual respect is still within reach. It starts with shifting away from viewing repairs as merely an expense to be minimized and recognizing that the role of an insurance policy is to make the homeowner whole again.

By investing in contractors’ expertise and allowing them to lead on repair decisions, insurance companies can foster goodwill not just with contractors but also with homeowners. Carriers should ensure that their adjusters are trained to collaborate and to respect the on-the-ground knowledge contractors bring to the table.

Likewise, contractors must continue advocating for themselves, demanding that their voices are heard in the claims process, and standing up when their expertise is disregarded. But they must also commit to educating homeowners and adjusters, helping to bridge the knowledge gap that has contributed to this industry-wide shift.

Conclusion

The shifts in the claims industry have left us with a system that no longer serves contractors, insurance carriers, or homeowners effectively. What was once a system of collaboration has become one of distrust, with non-experts dictating the terms of repairs while disregarding the voices of those who know best.

To restore balance, we must return control to those who are qualified to make decisions about repairs. Carriers must respect the expertise of contractors, software should be used as a tool—not a decision-maker—and homeowners deserve transparency at every step of the process.

The future of the claims industry depends on rebuilding the bridges that have been burned. It’s time to acknowledge the expertise contractors bring to the table and let them guide the path to restoring homes, one claim at a time.

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