Calculator Inputs
Use your best estimates. Add a premium if you paid extra for extended coverage.
Example Data Table
Illustrative scenario; numbers are for demonstration only.
| Scenario | Warranty Term | Replacement | Coverage | Degradation | Fail Risk | Discount | Expected PV |
|---|---|---|---|---|---|---|---|
| Residential storage | 10 yrs | $6,000 | 100% | 3.5%/yr | 1.5%/yr | 6% | $1,180 |
| Higher failure exposure | 8 yrs | $5,500 | 90% | 3.0%/yr | 3.0%/yr | 7% | $1,420 |
| Lower coverage, higher deductible | 12 yrs | $7,200 | 75% | 4.0%/yr | 1.0%/yr | 5% | $960 |
Run your own numbers for decision-making.
Formula Used
- Projected retention: Retention(y) = 100 × (1 − d)^y, where d is annual degradation (decimal).
- Inflated costs: Cost(y) = Cost₀ × (1 + i)^y, where i is replacement inflation (decimal).
- Proration factor: full before start year, then Linear or Step reduction.
- Failure claim probability (first failure): P_fail(y) = (1 − p)^(y−1) × p.
- Discount factor: PV(y) = 1 / (1 + r)^y, where r is discount rate (decimal).
- Expected value (PV): sum of discounted covered amounts × claim probability × approval probability, plus capacity-claim component (if triggered).
The calculator treats failure and capacity claims as mutually exclusive by using “survival” (no prior failure) before applying a capacity claim at the first threshold-crossing year.
How to Use This Calculator
- Enter replacement, labor, and any downtime costs you want protected.
- Set term, coverage, deductible, and claim approval probability.
- Choose a proration method that matches the warranty language.
- Add degradation and failure risk estimates from your environment.
- Pick discount and inflation rates that match your planning assumptions.
- Click Calculate, then download CSV or PDF if needed.