Finance category
Mortgage, loan, investing, tax, and money calculators.
Claim Severity Calculator
Severity and frequency are the actuarial foundation of insurance pricing. Severity = average dollar per claim. Frequency = claims per exposure-year. Together: pure loss cost. This calculator helps landlords benchmark their own loss experience against insurer pricing.
Claim severity (avg $ per claim)
$31,667
Claim frequency per 100 exposure-years
2.50%
Pure loss cost per unit-year
$792
Loss ratio
791.7%
How the math works
Claim severity = average $ paid per claim. Claim frequency = claims per exposure-year. Together they drive pure loss cost (severity × frequency) — the baseline insurers price against. High severity, low frequency: catastrophic events. Low severity, high frequency: small but frequent claims (water damage, burst pipe).
Pure loss cost + expense load + profit margin = fair premium. If your premium exceeds pure loss cost by more than 2x, you're paying for someone else's claims. Time to shop or self-insure portion.
How to Use
- Enter total paid losses over a multi-year window.
- Enter claim count and total exposure-years (e.g., 40 units × 5 years = 200).
- Enter current annual premium.
- Read severity, frequency, pure loss cost, and loss ratio.
Frequently Asked Questions
What's a good loss ratio?
Under 60% — you're a profitable client; may be overpaying relative to risk. 60-85% — fair pricing. Over 90% — insurer is losing money on you; premium will rise at renewal or coverage will be dropped.
How long a look-back?
Minimum 3-5 years for credible severity estimates. Insurers typically use 5-10 years for commercial real estate. One bad year shouldn't drive pricing conclusions.
Severity trends?
Severity has been rising 5-8% per year (inflation, labor, materials). Frequency is roughly flat for most property lines. Insurer pricing reflects severity trend more than anything.
Related Calculators
More Finance Calculators
Browse all finance →AI Cost Calculator
Compare token costs across OpenAI, Anthropic, and Google AI models. Calculate monthly API spending for GPT-4o, Claude, Gemini, and more.
Tip Calculator
Calculate the perfect tip and split the bill between friends. Choose preset percentages or enter a custom tip amount.
Bill Splitter Calculator
Split an uneven restaurant bill by item, divide tax and tip proportionally, and see exactly who owes whom.
Discount Calculator
Calculate sale price, discount amount, stacked discounts, sales tax, and total savings for any markdown.
Gas Mileage Calculator
Calculate MPG or km/L, estimate trip fuel cost, and compare annual fuel expenses between two vehicles.
Sales Tax Calculator
Add sales tax to a price, reverse-calculate the pre-tax amount from a total, and estimate tax for multiple items on one receipt.
Keep exploring
Next steps in Finance
Previous calculator
Claim Deductible Break-Even Calculator
Compare insurance deductibles — break-even claim count, annual premium savings, and 10-year savings.
Next calculator
Cleaning Fee Calculator
Price the cleaning fee for an Airbnb or vacation rental based on square footage, turnover complexity, and service level.