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Catastrophe Cash Need Calculator

Catastrophic events strain cash flow. This calculator sizes the bridge reserve.

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Total cash need

$466,000

BI lag cost

$186,000

Immediate (30-day)

$182,000

How the math works

Cash need = deductible + BI lag + uncovered + emergency ops. Immediate = ops + half deductible + 1 month BI.

Pre-authorize a $250-500k line of credit specifically for cat response, even if you expect to never draw on it. Cat events strike on weekends and holidays — you cannot originate new credit when every operator in your region is doing the same thing.

How to Use

  1. Enter total deductible exposure.
  2. Enter BI monthly need.
  3. Enter BI lag months.
  4. Enter uncovered damage.
  5. Enter emergency ops cost.
  6. Read total cash need.

Frequently Asked Questions

Why cash dries up?

Carrier takes 30-90 days for first payment. Tenants can't/won't pay when property is inaccessible. Fixed costs (debt, taxes, insurance) continue. Emergency ops (security, tarps, dry-out) required within 24-72 hours.

How much to reserve?

Conservative: 12 months of debt service + deductibles + 30-60 days opex. Aggressive: 6 months + deductibles. Coastal/high-peril zones should lean conservative; letting operations stall mid-claim destroys recovery.

Alternative structures?

Construction line of credit (draws as work progresses). Catastrophe bond or parametric cover (pays fast on trigger event without claim). Capital partners willing to advance. Each has cost but beats stalled recovery.

How do insurance carriers view this?

Insurance carriers underwrite per-peril and often stack deductibles — named storm, wind, hail, flood, and standard can all apply separately on a single event. Confirm with your broker which deductibles actually apply to your policy and stress-test liquidity against the highest applicable deductible. Endorsements and riders can modify base terms; read declarations carefully and keep a written summary on file for claim time.

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