InsuranceCoverageTools

Policy Limit Comparison

Project two policies forward at their own expected increase rates to see which is cheaper over the period you actually intend to keep it.

Last reviewed

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Free · No sign-up · Runs in your browser

Introductory pricing is normal in insurance, and it makes first-year comparisons misleading. A policy that wins on price today can be the more expensive one by year three if its increases run faster - and almost nobody notices, because the comparison is never repeated.

This tool projects both policies forward using the increase rates you supply and reports which one costs less over the period you actually expect to stay.

Your numbers

Results update as you type. Nothing is sent anywhere.

Policy A
Policy B

Result

Cheaper over the period

Policy B

Total difference

$377

Policy A total
$9,304
Policy B total
$8,926
Policy A final year
$2,099
Policy B final year
$1,600
Crossover year
Year 4
Policy A average per year
$1,551
Policy B average per year
$1,488

This is an estimate based on the values you entered. Actual premiums, coverage, eligibility and pricing vary by provider and by individual circumstances.

Increase rates are your assumptions. No carrier guarantees a future rate, and a policy that is cheaper today can be the more expensive one within a few renewals.

Premium by year

YearPolicy APolicy BDifferenceCheaper that year
1$1,090$1,380$290Policy A
2$1,243$1,421$179Policy A
3$1,417$1,464$47Policy A
4$1,615$1,508$107Policy B
5$1,841$1,553$288Policy B
6$2,099$1,600$499Policy B

How to use the policy limit comparison

  1. Enter the first-year premium for each policy.
  2. Enter the annual increase you expect for each - your own renewal history is the best source.
  3. Set how many years you realistically expect to keep the policy.
  4. Compare the total cost, and note the year in which the cheaper policy changes.

What people use this for

  • Evaluating a switching offer that looks cheap in year one.
  • Deciding whether to stay with a carrier whose renewals keep rising.
  • Planning insurance cost across a fixed period such as a loan term.
  • Comparing a stable carrier against an aggressive new-business one.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

Introductory pricing versus stability

Policy A at $1,090 rising 14% a year against Policy B at $1,380 rising 3%, held for six years.

Cheaper over the period
Policy B
Total difference
$377
Crossover year
Year 4

A two-year stay

The same policies where you expect to move or re-shop within two years.

Cheaper over the period
Policy A
Policy A total
$2,333
Policy B total
$2,801

New business and renewal pricing are different books

Most carriers price new business and renewals separately. A discount designed to win your business does not necessarily repeat, and the increase applied at the first renewal is where the difference shows up.

The only reliable input here is history. Ask what your renewals have done over the past three years with no coverage changes, and compare that against the new offer rather than against the promise.

Compounding does the damage

A persistent gap of a few points a year becomes large quickly. Six years at 14% roughly doubles a premium; six years at 3% raises it by about a fifth. On a $1,000 policy that is a difference of several hundred dollars a year by the end.

That is why the crossover year matters as much as the total: it tells you how long the cheaper offer stays cheaper.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

  • Each year’s premium is the previous year multiplied by (1 + increase). Totals are summed across the chosen number of years.
  • Increase rates are your assumptions. No carrier guarantees a future rate and this tool has no pricing data of its own.
  • All figures are estimates produced from the values you enter. This site has no rate feed and no carrier data, so it cannot quote or price a policy.
  • Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This calculator provides an estimate based on the information you enter. Actual insurance premiums, coverage, eligibility and pricing vary by provider and individual circumstances.

This website is not an insurance company, an insurance agency or a licensed broker. It does not sell insurance, does not provide insurance quotes, and is not authorised to give advice about which policy you should buy.

No result produced here is an offer of insurance or a guarantee of coverage. Only a licensed insurer or agent, working from your verified details, can quote or bind a policy.

Frequently asked questions

How do I estimate a carrier’s increase rate?

Compare your own renewal notices across the last three years with no coverage changes in between. That is the most reliable guide available to you.

Should I switch carriers every year?

Some people do. The trade-offs are the time involved, the loss of loyalty and claims-free benefits, and the fact that a gap in continuous coverage can itself raise future prices.

Does this include claims?

No. It compares premiums over time only. Use the coverage analyzer to bring deductibles and claims into the decision.

Is a lower total always the better policy?

Only if the coverage is equivalent. Compare limits, deductibles and exclusions before comparing price.

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