Insurance Premium Comparison Calculator
Policy A
Policy B
Claim Scenario
The Cheaper Premium Isn't Always the Cheaper Policy
Comparing two insurance policies by premium alone ignores the deductible and coverage limit attached to each — a lower premium with a high deductible can cost more than a higher premium with a low deductible, depending on how large a claim actually turns out to be. This calculator runs both policies against a specific claim scenario so the comparison reflects total cost, not just sticker price.
The Formula
Your Out-of-Pocket = Claim − Insurer Payout
Effective Cost = Annual Premium + Your Out-of-Pocket
Effective cost combines what you pay upfront (the premium) with what you'd pay if the specified claim happened, giving a single number for comparing policies under a real scenario rather than comparing premiums in isolation.
A Worked Example
Policy A: $800 premium, $2,000 deductible, $50,000 limit. Policy B: $1,400 premium, $500 deductible, $50,000 limit.
| Claim Amount | Policy A Effective Cost | Policy B Effective Cost | Better Value |
|---|---|---|---|
| $500 | $1,300.00 | $1,900.00 | Policy A |
| $2,000 | $2,800.00 | $1,900.00 | Policy B |
| $5,000 | $2,800.00 | $1,900.00 | Policy B |
| $15,000 | $2,800.00 | $1,900.00 | Policy B |
Policy A only wins when claims stay below its deductible; once a claim exceeds $2,000, Policy B's lower deductible makes it the better value in this example despite the higher premium.
Where This Matters
- Renewal shopping — when a competing quote arrives with a different premium and deductible combination, running a realistic claim scenario shows which policy actually costs less if something happens.
- High-deductible vs low-deductible tradeoffs — quantifies the breakeven claim size above which the lower-deductible policy becomes the better deal.
- Auto, home, or health policy comparisons — the same premium/deductible/limit structure applies across insurance types, so this works for any of them.
How to Use This Calculator
- Enter Policy A's annual premium, deductible, and coverage limit.
- Enter Policy B's annual premium, deductible, and coverage limit.
- Enter a claim amount to test both policies against.
- Select Calculate to see each policy's effective cost and which offers better value at that claim size.
Related Calculations
Get an illustrative premium estimate first with the Premium Calculator, or check auto-specific pricing with the Auto Insurance Calculator.