Jeff Diem, a Denver-based restoration contracting estimator, often encountered gaps between contractors' estimates and insurance company adjusters' estimates to repair residential property damage.
During a recent interview, Diem showed Digital Insurance a contractor's estimate for a relatively small residential repair, costing $8,200, containing 51 line items for specific items and materials. The estimate was generated using Xactimate, a software used by most contractors in the industry. Then Diem showed us the insurance adjuster's estimate, which was $3,000 less and contained only 41 line items.
"This is a small one," he said. "We do these for full homes, fires and floods. They will be hundreds of line items long and for hundreds of thousands of dollars. If you're an adjuster with 150 of these, you are the bottleneck. One of two things is going to happen. You're either going to take too long to review them, and that makes your policyholder angry, or you're going to rush it and be inaccurate, overpaying a claim."
Reconciliation of estimates became a constant burden for Diem as owner and founder of Elkmont Estimates, which writes estimates for contractors to help get those estimates approved by insurance carriers.
"We noticed that our clients were asking us time and time again to compare and reconcile these estimates," he said. On average, residential damage restoration contractors may spend about 80 hours per month on these reconciliations, Diem added.
Instead of hiring more staff to find and process the discrepancies, last year Diem founded Levlr, which provides software to automatically reconcile discrepancies in the estimates.
"It compares these two documents using
Levlr can send questions on discrepancies back to the contractor to review. This reduces the time needed to check estimates and increases their accuracy, according to Diem. The software is also useful for other vested interests in handling
"A project manager for a restoration company may have 15 of these at a time before another project manager is hired," Diem said. "An adjuster may have 100 to 150 of these at any given time. And then the light bulb moment went off, oh, my gosh, I've got public adjusters. I've got attorneys, I've got independent adjusters, I've got captive adjusters and the contractor side, all that are performing the exact same task, with no tool to take care of it."
Levlr software went live in April as a beta version for certain selected users. The company is open to users from both the carrier and contractor sides, Diem said.
"This is something that on the data side, you have larger organizations that are always looking for something like this, and they don't have access to this data or analysis that we could provide to them as well," he said.
The increasing costs of construction materials intensifies the need to manage what materials are really needed for a repair, observed Ellen Carney, principal analyst for application development and delivery at Forrester Research.
"Insurers are all about recovery and subrogation these days and want to pay a fair price for materials, and considering construction material inflation, Levlr is a good way to manage this," Carney wrote in a response to questions. "That lumber inflation is going to come roaring back, since a lot of the eastern Canada is softwood impacted by the wildfires."
