Convert an estimated annual homeowners insurance loss probability into a multi-year risk view. The calculator reports the chance of at least one loss, the chance of no loss, expected loss years, and probability-weighted total loss. Use several scenarios when future exposure may change, because the model deliberately assumes a constant annual probability and independent years.
Cumulative probability describes whether one or more losses occur during the period. Expected loss years is a separate average count and may be below one even when cumulative probability is substantial.
The model assumes the same annual probability and independent years. It does not model changing exposure, clustered catastrophes, aging effects, or policy coverage.
At a 5% annual probability over 10 years, the chance of at least one loss is:
The probability of no loss is 59.9%, and expected loss years equal 0.50.
It estimates the chance of at least one loss over the selected period when the same annual probability and independent years are assumed.
Simple multiplication double-counts scenarios with losses in more than one year. The complement formula avoids that problem.
In reality it can. This calculator holds it constant, so use separate scenarios when risk is expected to rise or fall.
No. Expected loss years is an average count, while cumulative probability is the chance of one or more loss years.
Yes. Correlated hazards or changing exposure require a more advanced model.
| Item | Model treatment |
|---|---|
| Annual probability | Constant in every projected year |
| Loss years | Independent from one year to the next |
| Average loss | Same planning amount per loss year |