How to Read a Scope of Loss — And What You're Missing

Walk into almost any roofing contractor's office and ask to see their last adjuster estimate. There's a decent chance they'll hand you a multi-page Scope of Loss document — and a near-certainty that they can't fully explain what's in it. That's not a knock on contractors. Xactimate is a specialized estimating system with its own logic, terminology, and pricing database. But that opacity costs contractors money every time an undervalued estimate goes unchallenged.

This guide walks through the anatomy of a Scope of Loss report so you know exactly what to look for — and what's commonly missing.

The Structure of a Scope of Loss

Every Scope of Loss report follows the same general structure:

• Header / Claim Info — Policy number, claim number, date of loss, insured's name and address. Always verify these match your records — errors here can delay payment.
• Scope of Loss Summary — A high-level description of the damage being covered. This is the adjuster's interpretation of what happened. Read it carefully — it often omits entire areas of damage.
• Line Item Detail — The heart of the estimate. This is where specific tasks are listed with their unit cost, quantity, and extended price. This is also where most of the money gets left on the table.
• Overhead and Profit (O&P) — Typically shown at the bottom as a percentage addition. Check whether it's included and whether it's calculated on the full scope.
• Depreciation — The reduction applied to arrive at the Actual Cash Value (ACV) from the Replacement Cost Value (RCV). Review carefully — depreciation is often applied incorrectly to line items that shouldn't be depreciated (like labor).
• Deductible — The portion the insured owes. Not negotiable, but worth confirming it's correctly applied.
• Net Payment — What the carrier is actually offering to pay. This is the number you're supplementing from.

Line Items Adjusters Routinely Miss on Roofing Claims

This is where the real money is. The following are among the most frequently omitted or undervalued line items on residential roofing Scope of Loss reports:

• Drip edge replacement — Required by code in most jurisdictions whenever shingles are replaced, but frequently omitted from adjuster estimates.
• Starter strip / starter course shingles — A separate material from standard shingles; should appear as its own line item.
• Ice and water shield upgrades — Many building codes require expanded ice and water shield coverage when replacing a roof. If the adjuster didn't include it, it needs to be supplemented with code documentation.
• Ridge cap as a separate line item — Some adjusters bundle this into the general shingle cost. It should be its own line.
• High-roof or steep-slope labor adder — Any roof with a 7:12 pitch or steeper should carry a steep slope labor adder in the Scope of Loss. Missing this on a steep residential roof is a significant undervaluation.
• Dumpster / haul-away — Debris removal should be a line item. If it's not there, add it.
• Permit fees — Frequently omitted; frequently required by local code.
• Flashing replacement — Around chimneys, skylights, and walls; often underquantified or left out entirely.
• Decking repairs — If you discovered rotted or damaged decking during the job, this is supplementable with documentation.

How to Read Scope of Loss Pricing

Scope of Loss pricing is based on regional databases that are updated quarterly. The price you see in the estimate reflects labor and material costs for your specific geographic market at the time of the estimate. This matters because:

• Prices from a claim written six months ago may be lower than current market pricing — and can be supplemented with an updated pricing date.
• The adjuster may have used the wrong region code — resulting in artificially low pricing.
• Scope of Loss line items have specific codes (like RFG refers to roofing). If the adjuster used the wrong code, the pricing may not reflect the actual scope.

What to Do When You Spot a Missing Item

Document it. Photograph it. Quantify it. Then build or request a supplement. A properly built supplement in carrier-ready format — with supporting documentation, line item codes, and pricing justification — is far more effective than a verbal or email dispute with the adjuster. Carriers are trained to respond to Xactimate, not conversations.

If you don't have Xactimate expertise in-house — and most roofing contractors don't — partnering with a roofing supplement company like Sovereign is the most efficient path to recovery. We read and build Scope of Loss reports every day, for contractors across the country, and we know exactly where the money is being hidden on your claim.