Claim Recovery Gap Calculator

Actual insurance payouts rarely match loss amount. Deductibles, coinsurance penalties, and policy limits create gaps. This calculator sizes them.

Total loss amount

Deductible

Coinsurance achieved %

Coinsurance required %

Policy limit

Recovery gap (owner loss)

$41,250

Actual insurance recovery

$208,750

Coinsurance penalty

$31,250

How the math works

Recovery = loss − coinsurance penalty − deductible, capped at policy limit. Gap = loss − recovery.

Audit coverage annually with broker. Property values rise; coinsurance ratios slip. A $50k coverage audit can prevent a $250k payout gap on a big loss.

How to Use

Enter total loss amount.
Enter deductible.
Enter coinsurance penalty %.
Enter policy limit.
Read actual recovery and gap.

Frequently Asked Questions

Why is there a gap?

Deductible (first $X of loss is owner's). Coinsurance (owner must insure 80% of value to avoid penalty). Policy limit (insurance won't pay beyond limit). Exclusions (flood, earth movement, war).

Coinsurance penalty?

If insured-to-value < 80% (or 90%), payout is reduced proportionally. E.g., insured 60% of value = pays only 75% of claim (60% ÷ 80%). Big gap.

How to avoid gaps?

Insure to 100% replacement cost. Zero deductible (expensive) or modest. Umbrella policy for beyond primary limits. Work with a broker who audits coverage annually.

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.