This sample illustrates how limits, deductibles, and downtime affect the estimated payout.
| Replacement cost | Damage % | Property limit | Deductible | Daily profit | Downtime | BI limit | Total payable | Out-of-pocket |
|---|---|---|---|---|---|---|---|---|
| USD 500,000 | 25% | USD 350,000 | USD 5,000 | USD 3,000 | 30 days | USD 120,000 | USD 183,250 | USD 18,750 |
- Gross Damage = Replacement Cost × (Damage % ÷ 100)
- Depreciation Factor (ACV) = min(Depreciation Rate × Age, 80%)
- Net Property Loss = max(Gross Damage − Depreciation Amount, 0)
- After Salvage = max(Net Property Loss − Salvage, 0)
- After Deductible = max(After Salvage − Deductible, 0)
- Coinsurance Factor = min(1, Amount Insured ÷ (Coinsurance % × Replacement Cost))
- Property Payable = min(After Deductible × Coinsurance Factor, Property Limit)
- Effective Downtime = Downtime × (1 − Mitigation % ÷ 100)
- Payable BI Days = max(Effective Downtime − Waiting Days, 0)
- BI Loss = Payable BI Days × Daily Gross Profit
- BI Payable = min(BI Loss + Extra Expense, BI Limit)
- Total Payable = Property Payable + BI Payable
- Enter your property replacement cost and the expected damage percentage.
- Select the coverage basis. Choose ACV if depreciation applies.
- Set your policy terms: property limit, deductible, and coinsurance.
- Estimate downtime and daily gross profit to model business interruption.
- Optional: add extra expense and a mitigation reduction percentage.
- Click Calculate to view results above the inputs.
- Use Download CSV or Download PDF for documentation.
Loss severity and gross damage
Gross damage is estimated as replacement cost multiplied by the damage percentage. For example, a USD 500,000 property at 25% severity produces USD 125,000 gross damage. If severity increases to 40%, gross damage rises to USD 200,000, helping stress‑test repair budgets and cash needs.
Replacement cost versus ACV depreciation
If coverage is Actual Cash Value, depreciation reduces the claimable amount. The calculator applies an annual depreciation rate times asset age, capped at 80%. With 8 years and 5% per year, the factor is 40%, so USD 125,000 gross damage becomes USD 75,000 after depreciation. At 12 years, the factor reaches 60%, dropping the same gross damage to USD 50,000.
Deductible, salvage, and the adjusted loss
Salvage and recoveries lower the loss before the deductible. Using USD 10,000 salvage and a USD 5,000 deductible, the USD 75,000 loss becomes USD 65,000 after salvage and then USD 60,000 after deductible. Recording salvage realistically avoids overstating the insurer’s share for recoverable inventory or equipment resale.
Coinsurance and limit effects
Coinsurance compares your amount insured to the required amount, typically a percentage of replacement cost. If the requirement is 80%, the required insurance on USD 500,000 is USD 400,000. With a USD 350,000 limit, the coinsurance factor is 0.875, reducing a USD 60,000 post‑deductible loss to USD 52,500, before applying the policy limit. Raising the limit to USD 450,000 restores the factor to 1.000 and removes the proportional penalty.
Business interruption and recovery planning
Business interruption is modeled from payable downtime days times daily gross profit, plus extra expense, capped by the BI limit. With 30 downtime days, 10% mitigation, and a 3‑day waiting period, payable days are 24. A USD 3,000 daily profit yields USD 72,000 BI loss; adding USD 15,000 extra expense totals USD 87,000, limited by coverage. If mitigation improves to 25%, payable days fall to 19.5 and BI loss drops to USD 58,500. Use the out‑of‑pocket estimate to set emergency liquidity targets for each location.
1) What does this calculator estimate?
It estimates property claim payable, business interruption payable, total payable, and likely out‑of‑pocket costs using your loss severity, policy limits, deductible, coinsurance, and downtime assumptions.
2) How is coinsurance applied here?
Coinsurance factor equals min(1, amount insured divided by required insurance). Required insurance equals coinsurance percentage times replacement cost. The factor reduces the post‑deductible loss before the policy limit is applied.
3) When should I choose ACV instead of replacement cost?
Choose ACV when your policy settles on actual cash value or when depreciation is required for certain assets. ACV reduces the gross damage by a depreciation factor based on asset age and annual depreciation rate.
4) How is business interruption calculated?
Payable BI days equal effective downtime minus the waiting period. Effective downtime is downtime reduced by mitigation. BI loss equals payable days times daily gross profit, then extra expense is added and the total is capped at the BI limit.
5) Why can out-of-pocket be higher than my deductible?
Out‑of‑pocket includes deductible, coinsurance penalties, and any amounts above property or BI limits. It can also reflect downtime costs that exceed BI coverage and extra expenses beyond the stated limit.
6) Can I use the exports for claim submission?
Exports are best for internal planning and documentation. Insurers typically require detailed inventories, invoices, financial statements, and adjuster assessments. Use the CSV/PDF as a starting summary and attach supporting evidence.