What claim rate should a new product use?

Start from the closest fielded product and adjust for design change and duty. If there is no comparable, run the reserve at a low and a high rate and hold the higher figure until early claims data arrives.

Why is the V1 default claim rate different?

The original page defaulted to an 80% claim rate, which reads as a warranty assumption but describes a product where most motors come back. This page defaults to 2% and expects you to enter your own rate.

Does the fixed program cost belong in the per-unit figure?

Yes. The per-unit reserve spreads the whole reserve, variable plus fixed, over the motors shipped. On a small shipment the fixed charge dominates, which is why pilot lots carry a high reserve per unit.

How much reserve should a mature product hold?

Enough to cover claims through the warranty term, not just the first year. Use your observed claim rate, add a margin for late claims, and review the reserve as field data accumulates.

Motors, Generators & Electrification Equipment calculator

Warranty Reserve per Unit Calculator

Set aside a warranty reserve for a shipment from the claim rate you expect, the cost of one claim and a fixed program charge. The per-unit figure is what each shipped motor carries.

What this calculator does

Warranty reserve for a shipment, from the shipped count, the claim cost and rate, and a fixed program charge.

Formula used

Variable reserve = motors shipped × claim cost per claimed motor × expected claim rate ÷ 100
Total warranty reserve = variable reserve + fixed warranty program cost
Warranty reserve per unit = total warranty reserve ÷ motors shipped

Inputs explained

Motors Shipped: Whole motors shipped in the period the reserve covers.
Claim Cost per Claimed Motor: Average repair or replacement cost of one warranty claim.
Expected Claim Rate: Share of shipped motors expected to generate a claim.
Fixed Warranty Program Cost: Fixed program and administration cost charged to this run.

How to use the result

Best suited to setting a warranty accrual per shipped motor, pricing a new design with limited claim data, comparing reserve impact across claim rates.
A claim rate from a new design is a guess until field data arrives. Claims often arrive long after shipment, so the reserve should be held.

Current U.S. benchmarks

The producer price index for primary nonferrous metals (a broad metals benchmark, not copper alone) stands at 544.731 (BLS, Aug 2026), up 49.3% from a year earlier. Quotes priced off last quarter's material cost miss this move. Global copper trades at $13,543 per tonne (IMF via FRED, Jul 2026).
Steel mill PPI stands at 381.162 (BLS, Aug 2026), up 23.4% from a year earlier. New factory orders are up 8.5% year over year (Census).
The U.S. has 5,397 electrical equipment and appliances establishments employing about 369,437 workers (Census County Business Patterns, 2023).

Common questions

What claim rate should a new product use? Start from the closest fielded product and adjust for design change and duty. If there is no comparable, run the reserve at a low and a high rate and hold the higher figure until early claims data arrives.
Why is the V1 default claim rate different? The original page defaulted to an 80% claim rate, which reads as a warranty assumption but describes a product where most motors come back. This page defaults to 2% and expects you to enter your own rate.
Does the fixed program cost belong in the per-unit figure? Yes. The per-unit reserve spreads the whole reserve, variable plus fixed, over the motors shipped. On a small shipment the fixed charge dominates, which is why pilot lots carry a high reserve per unit.
How much reserve should a mature product hold? Enough to cover claims through the warranty term, not just the first year. Use your observed claim rate, add a margin for late claims, and review the reserve as field data accumulates.

Last reviewed 2026-10-01.