Calculator
Example comparison table
| Provider | Premium | Frequency | Deductible | Coverage Limit | Discounts | Fees |
|---|---|---|---|---|---|---|
| Alpha Insurance | $110 | Monthly | $750 | $100,000 | 8% | $0 |
| Beacon Mutual | $300 | Quarterly | $500 | $120,000 | 5% | $25 |
| Cedar Assurance | $1,050 | Annual | $1,000 | $90,000 | 12% | $0 |
Formula used
- Annualized premium = premium amount × periods per year (based on billing frequency).
- Net annual premium = annualized premium × (1 − discount%/100) + annual fees.
- Expected out-of-pocket = claim probability × min(deductible, average claim amount).
- Coverage penalty = max(0, 1 − quoteLimit/currentLimit) × weight% × current annual premium.
- Expected annual total = net annual premium + expected out-of-pocket + coverage penalty.
- Savings = current expected total − quote expected total.
How to use this calculator
- Enter your current premium, frequency, deductible, and coverage limit.
- Set a realistic annual claim probability and an average claim amount.
- Adjust the coverage penalty weight if you value higher limits.
- Add one or more competing quotes with discounts and any annual fees.
- Click Compare savings to rank options and view savings.
- Use Download CSV or Download PDF to save results.
Premium normalization matters
Insurers bill weekly, monthly, quarterly, or annually. This tool annualizes every quote so pricing is comparable. A $125 monthly premium becomes $1,500 per year, while $300 quarterly becomes $1,200. Biweekly (26) and weekly (52) schedules are scaled automatically. Discounts are applied to the annualized premium and fixed yearly fees are added to produce a net premium.
Expected cost blends price and risk
The lowest premium does not always mean the lowest outcome. The calculator estimates expected annual total as net premium plus expected out-of-pocket. With a 6% claim chance and a $2,500 average claim, expected out-of-pocket equals 0.06 × min(deductible, $2,500). A $500 deductible yields $30; a $1,000 deductible yields $60. It is an average for planning.
Deductible sensitivity and claim sizing
Deductibles matter most when typical claims are small. If average claims are $800, then min(deductible, $800) caps the deductible impact. A $1,500 deductible behaves like $800 in the formula because you rarely pay beyond the claim size. If you raise the deductible to cut premium, confirm expected savings still exceed added risk.
Coverage limits and underinsurance drag
Lower coverage can create hidden exposure. When a quote’s coverage limit is below your current limit, a penalty is applied: gap × weight × current annual premium. If your current limit is $100,000 and a quote offers $90,000, the gap is 10%. With a 20% weight and a $1,500 current premium, the penalty is $30. If a quote offers higher coverage, the penalty becomes zero; adjust weight to match comfort.
Interpreting savings and ranking outcomes
Savings equal current expected total minus each quote’s expected total. Positive savings indicate a potentially cheaper policy after risk adjustments; negative savings signal higher expected cost. When savings are close, use fees, deductibles, and coverage limits as tie-breakers. Re-run with a higher average claim to stress-test outcomes, then export CSV or PDF for renewal discussions.
FAQs
What does “expected annual total” mean?
It is the estimated yearly cost of a policy: net annual premium plus expected out-of-pocket from the deductible, plus any coverage penalty for lower limits. It helps compare quotes on a consistent, risk-aware basis.
How should I set the claim probability?
Use your recent claim history, local hazard exposure, and policy type as guides. Start with 3–10% for low-frequency risks, then test higher values to see how rankings change under more conservative assumptions.
Why is there a coverage penalty?
A lower limit can shift more loss to you. The penalty approximates that underinsurance risk by increasing expected cost when a quote’s limit is below your current limit. You can reduce or increase the penalty weight to match comfort.
Do discounts apply before or after fees?
Discounts reduce the annualized premium first. After discounts, the calculator adds any fixed annual fees to produce the net annual premium. This mirrors how many carriers apply percentage discounts to premium, not to service charges.
Can I compare more than three quotes?
Yes. Use “Add another quote” to compare up to eight quotes at once. Empty rows are ignored, so you can add only the options you want. For clean comparisons, keep frequencies and coverage definitions consistent across quotes.
Is the PDF export an official policy document?
No. The PDF is a simple summary of your inputs and results for record-keeping and renewal conversations. Always confirm final pricing, endorsements, and coverage terms with the insurer or agent before switching policies.