RFG vs. DMO Pricing and Why it Matters for Insurance Claims

2020-04-17T07:39:00-04:00 December 19th, 2019|

Researched and Written by DJ Sedlacek

In every carrier estimate the pricing for roofing material tear off is set at DMO pricing as if a different subcontractor would go up on the roof to tear off the material rather than the roofer replacing the material. Why does this happen?

Backed by the insurance industry, Xactware opened business in 1986 with it’s estimating system, Xactimate. The software made it much faster and more accurate to estimate repairs. However, the software is only a tool to be interpreted by an estimator whom should change items as needed to establish fair pricing. Xactimate defaults to DMO pricing for tear off of roofing material. This would make sense for a total loss such as a fire, but with majority of claims being from storm damage, this definitely misses the mark.

Any estimator reviewing the cost of business at a given property should be able to change this default setting when warranted. Roofer work is more skilled labor than a demolition crew. The workman’s compensation premiums are higher due to the job risk for roofers requiring a higher but appropriate pricing.

How to change it?

In the quick entry portion of Xactimate in the top right hand corner there will be the “removal price” and to the right the “trade” which is automatically set to DMO. Simply click the drop down arrow on the trade portion and change to RFG.

Xactimate Software

Reasons to explain to the carrier RFG pricing is warranted on roof tear off?
1. The same crew doing the tear off is doing the roof replacement and deserve a comparable wage.
2. If there are steep/height charges, a DMO crew is not skilled enough to perform the tear off. It requires skill labor from a roofing trade due to the need of roofers to be tied off.
3. The DMO tear off adds another trade to the estimate. Does the carrier want to pay the roofer to do it, or do they want to pay O&P for coordination of the extra trade?

All of these reasons are simple examples of the expertise the Premier Claims Adjusting Team adds to your claim negotiation on a daily basis. Contact us today at info@premier-claims.com or 877.219.0049.