Property Damage Loss Assessment Calculator
Estimate your total insurable property damage loss by factoring in replacement cost, depreciation, policy deductible, and additional living expenses (ALE).
Formulas Used
1. Depreciation Rate (Straight-Line, capped at 80%):
Dep Rate = min(Age ÷ Useful Life, 0.80)
2. Depreciation Amount:
Dep Amount = RCV × Dep Rate
3. Actual Cash Value (ACV):
ACV = RCV − Dep Amount
4. Net Loss Before Deductible:
Net Loss = max(ACV − Salvage Value, 0)
5. Net Loss After Deductible:
Net After Ded = max(Net Loss − Deductible, 0)
6. Total Estimated Claim Payout:
Total Claim = min(Net After Ded + ALE, Coverage Limit)
(Coverage Limit only applied when > 0)
Assumptions & References
- Depreciation is calculated using the straight-line method, the most common approach in property insurance claims (ISO, NAIC guidelines).
- Depreciation is capped at 80% of RCV, consistent with standard insurance industry practice to preserve minimum residual value.
- Actual Cash Value (ACV) = Replacement Cost − Depreciation, per Insurance Services Office (ISO) and most state insurance regulations.
- Additional Living Expenses (ALE) / Loss of Use coverage is added on top of the ACV payout, as is standard under homeowners policies (ISO HO-3 form).
- The deductible is subtracted from the net ACV loss only; ALE is typically not subject to the deductible under most policies.
- Results are estimates only. Actual claim payouts depend on your specific policy terms, insurer adjustments, and applicable state laws.
- References: ISO HO-3 Homeowners Policy Form; NAIC Property & Casualty Insurance Model; Couch on Insurance (3rd Ed.).