Insurance Adjusters and Estimators—Do You Really Understand Construction Specifications? Learn From the Construction Specification Institute

Steven Coombs is someone I would affectionally call a master insurance coverage nerd. He recently wrote an International Risk Management Institute n/k/a IRMI article, General Requirements versus General Conditions. He stated the following:

Both general requirements and general conditions are indirect costs of construction but are essential to the overall execution of a construction project. These are project-specific costs and are separate from general overhead or profit.

‘General requirements’ are detailed technical standards that must be met during construction. These relate to what must be provided for. Architects necessarily create detailed specifications for each construction project they work on. There are thousands of building components and materials involved in construction, and there must be a uniform system for organizing and communicating these. Such a system is required to provide guidance to contractors that eventually must build the project. The accepted industry standard for specifications relating to most types of construction projects is MasterFormat®. The specifications are divided into 48 divisions. These follow the same sequence in which a building is built. For instance, ‘concrete’ precedes ‘masonry’ and so on.

How many of you have studied or even know of the MasterFormat? I am amazed how many property insurance adjusters and estimators call themselves “experts” and have no idea about the most common and accepted construction industry standard for construction specifications.

A comprehensive understanding of construction specifications, particularly the materials and methods required for rebuilding, is essential for property insurance adjusters and estimators to perform their duties effectively. Training from the Construction Specifications Institute (CSI) and familiarity with its MasterFormat® system significantly enhance an adjuster’s ability to accurately estimate damages and ensure policyholders receive fair settlements.

Construction specifications are detailed documents and standards that outline the materials, workmanship, and processes required for building projects. For property insurance adjusters and estimators, knowledge of these specifications is crucial for several reasons:

Accurate Damage Assessment: Understanding the specific materials and construction methods used in a building enables adjusters to identify the extent of damage accurately. This knowledge ensures that all affected components are accounted for during the evaluation.

Precise Repair Estimates: Familiarity with construction specifications allows adjusters to develop detailed and accurate repair estimates. By knowing the exact materials and methods required, they can provide cost assessments that reflect the true scope of work needed for restoration.

Effective Communication: Adjusters often interact with contractors, engineers, and policyholders. A solid grasp of construction terminology and specifications facilitates clear communication, reducing misunderstandings and ensuring that all parties are aligned regarding the repair process.

Compliance with Building Codes: Knowledge of current construction standards and specifications ensures that proposed repairs comply with local building codes and regulations, preventing future issues related to non-compliance.

The Construction Specifications Institute (CSI) is a renowned organization dedicated to improving the documentation and communication of construction information. One of its key contributions is the development of the MasterFormat®, a standardized system for organizing construction documents.

MasterFormat® organizes construction information into a standardized format, dividing it into 50 divisions that cover various aspects of building projects. This structure allows adjusters to approach damage assessment systematically and ensures that no component is overlooked. By utilizing MasterFormat®, adjusters can access detailed information about specific construction elements, leading to more accurate and comprehensive damage estimates. This precision is crucial in determining fair compensation for policyholders. It does not replace Xactimate, Simsol, or other estimating software systems, but it clearly makes those estimates much more accurate by applying the critical specifications that may only be generally referenced.

CSI offers various educational programs and resources that equip adjusters with in-depth knowledge of construction specifications and the MasterFormat® system. Engaging in these training opportunities enhances an adjuster’s proficiency in evaluating building damages and understanding the complexities of reconstruction. The CSI website states this about itself:

Founded in 1948, CSI is a national not-for-profit association of more than 6,000 members dedicated to improving the communication of construction information throughout continuous development and transformation of standards and formats, education and certification of professionals to improve project delivery processes. CSI members work tirelessly to effectively communicate the designers’ vision, the material producers’ solutions and the constructors’ techniques to create outstanding facilities that meet facility owners’ objectives.

CSI is dedicated to improving the communication of construction information through:

A diversified membership base of allied professionals involved in the creation and management of the built environment. Join us!

Continuous development and transformation of standards and formats. Education and certification of professionals to improve project delivery processes. Creation of practice tools to assist users throughout the facility life-cycle.

MasterFormat® promotes consistency and clarity in construction documentation, which helps adjusters adhere to industry best practices during the assessment and estimation processes. This adherence ensures that all evaluations are thorough and standardized.

The recent 2025 wildfires in Southern California resulted in extensive damage, with over 16,000 structures affected and insured losses estimated between $28 billion and $75 billion. In such scenarios, adjusters equipped with a deep understanding of construction specifications and trained in systems like MasterFormat® are better prepared to assess damages accurately and expedite the claims process, thereby facilitating efficient recovery for policyholders. How does one rebuild a structure based on specifications that an actual contractor will have to adhere to? Policyholders with significant damages should be wary of any contractor who agrees to do work without a solid construction contract that outlines exactly how the rebuilding is to take place, the materials to be used and other specifications that can hold a builder accountable to building to a specification rather than a vague standard.