Work out pet insurance value instantly with clear inputs, formula shown and shareable results.
Expected payout is the claim probability times the claim value less the excess, and the expected value of the policy is that payout minus the annual premium. Insurance is normally expected to lose money on average; its value is capping a catastrophic bill, which is why the break-even chance matters more than the sign of the expected value.
Expected value
EV = claim chance x (average claim - excess) - annual premium
Break-even chance
chance = annual premium / (average claim - excess)
EV = claim chance x (average claim - excess) - annual premium. Expected payout is the claim probability times the claim value less the excess, and the expected value of the policy is that payout minus the annual premium.
Insurance is normally expected to lose money on average; its value is capping a catastrophic bill, which is why the break-even chance matters more than the sign of the expected value.
Enter monthly premium, excess per claim, chance of claiming in a year, average claim value. The defaults shown are a realistic worked example — swap in your own figures to get a result you can use.