After Just 3 Months of "Xactimate Median Only," Prices Can Drop Over 20%
Let's talk about something almost nobody explains clearly 👇
When an adjuster says:
"We only pay the Xactimate Median Price. That's the standard."
…it sounds fair. But mathematically, if that rule is enforced 100% of the time, it pushes prices down in a way that has nothing to do with real market costs.
This applies to any trade, any line item – not just one specific service.
Step 1 – How the "median price" is created
Xactimate (or any pricing database) looks at real contractor invoices:
- Some charge less
- Some charge more
The software crunches those numbers and says, "Based on this mix, the median/average price is $100."
That $100 only exists because there are prices above and below it.
Step 2 – What happens if no one is allowed to charge more?
Now imagine carriers enforce this rule:
"We will only pay exactly the Xactimate median. If you charge more, we cap you at that number."
We'll use simple round numbers so it's easy to follow:
- Some contractors are at $70
- Others are at $130
- The starting "standard" price is $100
Now watch what happens over just 3 months.
🗓 January – Real market starting point
- Market pricing ranges roughly from $70 to $130
- Xactimate sees that mix and lands at about $100 as the "standard" price
- So far, that's still somewhat reflective of a real market
🗓 February – First month of strict "median only"
- Adjusters now only pay $100
- Contractors who used to bill $130 get chopped down to $100 on the invoices that go into the system
- Xactimate now mostly "sees" $70 and $100
- Average/median of those numbers? About $85
👉 The "standard" price just dropped from $100 → $85 in one month.
🗓 March – Second month of strict "median only"
- Now the "standard" is $85, so adjusters say they will only pay $85
- Anybody who tries to bill more than $85 gets capped at $85 in the data
- Xactimate mostly "sees" $70 and $85
- Average/median of those numbers? About $78
👉 The "standard" price just dropped again from $85 → $78.
The result after just 3 months
In this simple example:
- Month 1 "standard": $100
- Month 2 "standard": $85
- Month 3 "standard": $78
That's over a 20% drop in the "standard" price in just three months – not because the real cost of doing the work fell by 20%, but because no one was allowed to bill above the median that Xactimate is trying to measure.
If that logic keeps getting enforced:
- The higher legitimate prices are never seen in the data
- The next "average/median" keeps sliding downward
- The published number gets pulled toward the cheapest outlier, not toward a fair market rate for professional work
Why this matters
So when someone says:
"We only pay the Xactimate Median. That's the standard."
The question back is:
Do you realize that if everyone is only allowed to charge the median, the next month's median is guaranteed to go down – even if the real-world cost of doing the work hasn't dropped at all?
That's the quiet math behind how "median-only" enforcement can slowly turn a market-based guide into a race to the bottom.
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