Warranty and Insurance Check: Price per Dollar of Cover

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A policy or warranty

Price a month $

Months

Or a one-off price $, optional

Chance of a claim over the period %

Average repair or loss $

Deductible you pay per claim $

Load an example from the book

Which deductible?

Small deductible $

Its yearly price $

Big deductible $

Its yearly price $

Chance of a claim in a year %

Enter your numbers, then press Calculate.

From the book, Chapter 14. Phone insurance at $8 a month for 24 months ($192), with a 15% chance of a $300 repair and a $50 deductible: expected benefit $37.50, so 5.12 dollars paid per $1, and it breaks even only at a 76.8% chance of a claim. A $90 warranty against a 10% chance of a $180 repair: $18 expected. The $1,000 deductible saves $120 a year and costs $75 in expected extra deductible: $45 a year better on average, as long as the claim chance is below 16%. The three questions: is it rare, is it large, could you pay it?

Assumes at most one claim in the period, larger than the deductible. Illustrative arithmetic, not insurance advice. Everything stays in your browser: no sign-up, nothing stored or sent.