Claim Insurance vs. Out-of-Pocket Cost

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u/Monopoly · Joined Oct 2024

Deciding whether to file an insurance claim or pay out-of-pocket? Use this calculator to weigh your options and find the best financial choice.

Last update Oct 2024
  • Scenario 1: File an Insurance Claim
  • Scenario 2: Pay Out Of Pocket
  • Which One Is Higher (%)

This chart compares costs over time, showing how the insurance claim option increases due to premium hikes. Watch for the rising trend and compare it to the steady out-of-pocket costs to determine the best financial choice.

# Years from Now

Try your numbers:

Enter the total cost required to repair the damage to your property.

A =

Input the amount you'll need to pay out of pocket before your insurance coverage kicks in.

B =

Specify your current yearly insurance premium amount for your home coverage.

C =

Indicate the percentage by which your insurance premium is estimated to increase after filing a claim.

D =

Enter the number of years you anticipate the premium increase will remain in effect following your claim.

E =
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If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

When you file an insurance claim, you’ll pay the deductible upfront, followed by increased premiums over the next few years. This option may initially seem lower in cost, but the cumulative premium hikes can add up significantly.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

F̃ =
G̃ =
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Calculations

(Expressions are evaluated at every year.)

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