Property Damage Loss Calculator
Estimate your total insurable property damage loss including repair/replacement costs, depreciation, additional living expenses (ALE), and lost rental income.
Formulas Used
1. Depreciation Rate (Straight-Line)
Depreciation Rate = (1 − Salvage%) ÷ Useful Life
2. Accumulated Depreciation
Accumulated Depreciation = Repair Cost × Depreciation Rate × Property Age
3. Actual Cash Value (ACV)
ACV = Repair Cost − Accumulated Depreciation
4. Additional Living Expenses (ALE)
ALE = Monthly ALE × Displacement Months
5. Lost Rental Income
Lost Rental = Monthly Rental × Rental Loss Months
6. Gross Loss
Gross Loss = ACV + ALE + Lost Rental
7. Net Insurable Loss
Net Loss = max(0, Gross Loss − Deductible)
Assumptions & References
- Depreciation is calculated using the straight-line method, consistent with ISO property loss valuation guidelines and standard insurance practice.
- Actual Cash Value (ACV) = Replacement Cost Value (RCV) minus depreciation, per NAIC property insurance standards.
- Salvage value represents the residual value of the property at end of useful life (default assumption: 10%).
- Additional Living Expenses (ALE) cover temporary housing and increased cost of living while the property is uninhabitable, as defined under ISO HO-3 homeowners policy forms.
- Lost Rental Income applies when the damaged property is a rental unit; covered under most landlord/dwelling fire policies.
- The deductible is subtracted from gross loss to reflect the policyholder's out-of-pocket obligation before insurance pays.
- This calculator does not account for policy sublimits, co-insurance clauses, or ordinance/law coverage.
- References: ISO HO-3 Policy Form; NAIC Property & Casualty Insurance Model; Appraisal Institute — The Appraisal of Real Estate, 15th ed.