Roofing, Siding & Exterior Building Products worked example

Warranty Reserve at 1.8% projected claim incidence: a worked example in roofing, siding & exterior building products

Suppose projected claim incidence falls to 1.8%. This page works the full calculation at that level so you can see exactly which result moves and by how much. Estimates the warranty reserve to set aside on a roofing or siding shipment from squares covered, expected claim cost per square, projected claim incidence, and flat administrative overhead.

The inputs for this scenario

  • Squares shipped under warranty: 1,200 squares (held at the documented default)
  • Expected claim cost per square: 45 $/square (held at the documented default)
  • Projected claim incidence: 1.8 % (the input this scenario stresses; the baseline uses 2.5)
  • Admin & inspection overhead: 150 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Total warranty reserve = squares shipped x claim cost per square x claim incidence + admin overhead.
  • Total warranty reserve cost works out to 1,122 $ at these inputs, and this is the headline figure for the scenario.
  • Warranty reserve cost per unit works out to 0.94 $ / piece at these inputs.
  • Variable warranty reserve cost works out to 972 $ at these inputs.
  • Fixed warranty reserve adder works out to 150 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where projected claim incidence sits at 2.5% and the headline result is 1,500 $, this scenario comes in 25.2% below the baseline at 1,122 $.
  • It computes the total warranty reserve and the reserve per square from squares shipped, expected claim cost, projected incidence, and fixed administrative overhead. When the numbers land here, the stressed input is the lever to work; the walkthrough above shows exactly how much each output recovers as it climbs back toward the baseline.

Results at a glance

  • Total warranty reserve cost: 1,122 $ (headline result)
  • Warranty reserve cost per unit: 0.94 $ / piece
  • Variable warranty reserve cost: 972 $
  • Fixed warranty reserve adder: 150 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Warranty Reserve calculator, set projected claim incidence to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.