Insurance
Net annual benefit
Subtracts the frequency-weighted extra out-of-pocket cost from the saving.
The Formula
Net = saving - (extra deductible x claims per year)
Subtracts the frequency-weighted extra out-of-pocket cost from the saving.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| dD | Extra deductible | currency | High deductible minus low deductible. |
| f | Claim frequency | rate | Expected claims per year. |
What Each Symbol Means
dDcurrency
Extra deductible
High deductible minus low deductible.
frate
Claim frequency
Expected claims per year.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate car insurance deductible page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Car Insurance Deductible, filed under Finance. Every number the guide produces comes from substituting into this one line.