Scope of Loss
A scope of loss is the adjuster's written, line-by-line inventory of all damage at a property and the estimated cost to repair it. Created in Xactimate, the scope of loss determines the initial claim payment and serves as the baseline for any supplements.
The Starting Line for Every Claim
A scope of loss is the adjuster's line-by-line inventory of all damage at a property and the estimated cost to repair each item, created in Xactimate, and it is the single most important document on an insurance claim because it determines the initial payment. Created in Xactimate, the scope of loss serves as the baseline for the entire claim. Every line item, every measurement, every material specification on the scope of loss directly affects the check the policyholder receives. It is the single most important document on the claim.
What the Scope Includes
A complete scope of loss contains the adjuster's line-by-line damage assessment, material specifications, measurements, and cost calculations. The adjuster inspects the property, documents the damage, and builds the scope in Xactimate using the carrier's pricing database.
| Scope Component | What It Contains | Why It Matters |
|---|---|---|
| Line items | Each damaged component with pricing | Determines total RCV |
| Measurements | Square footage, linear footage from Sketch | Drives quantity calculations |
| Material specs | Shingle type, siding material, etc. | Affects price per unit |
| Depreciation schedule | Age-based deductions per item | Determines ACV payout |
| Photos | Adjuster's damage documentation | Supports or limits the scope |
Why the Initial Scope Is Almost Always Short
Industry data suggests the average scope is written for 50-65% of what the repair actually costs. That gap is not always intentional - adjusters are working under time pressure, carrier guidelines, and volume quotas. But the result is the same: the initial scope almost always underestimates the actual cost to repair the property correctly.
Common scope shortfalls include missed siding damage when the adjuster focused on the roof, underestimated waste factors, excluded code upgrades, and missing trades that should trigger O&P. That 35-50% gap between the initial scope and the actual repair cost is your supplement opportunity.
Who Writes the Scope
The carrier's adjuster writes the official scope of loss - either a staff adjuster or an independent adjuster. Public adjusters may write a competing scope on behalf of the homeowner. When both scopes exist, the negotiation happens line by line in Xactimate, comparing the carrier's scope against the PA's or contractor's scope.
Your job is to review the carrier's scope against reality. Walk the property with the scope in hand. Check every measurement against your own. Verify every material specification. Identify every missing line item. The scope of loss is the starting line - not the finish line.
Further reading
Frequently asked questions
A scope of loss includes the adjuster's line-by-line inventory of all damage at the property, the estimated cost to repair each item, material specifications, measurements, and photos. It is created in Xactimate and becomes the basis for the initial insurance payment.
Yes. If the scope of loss misses damage, underestimates quantities, or excludes code-required work, the contractor or public adjuster files a supplement in Xactimate to request additional payment. Industry data suggests the average scope is written for 50-65% of actual repair costs.
The insurance carrier's adjuster - either a staff adjuster or an independent adjuster - writes the scope of loss after inspecting the property. Public adjusters may write a competing scope on behalf of the homeowner.
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