How much you could save with a higher deductible and the reasons to raise it

How much increasing your deductible will save you each year

Increasing your deductible to $2,500 from $500 saves an average of $512 a year on a policy with $300,000 in dwelling coverage and $100,000 in liability. Not all carriers offer the same deductible options, and the savings depend on where you live, in addition to your insurance company.

How much you will save by increasing your deductible depends on:

The insurance company
Where you live and the amount of the deductible you choose
The deductible options available to you: Since not all insurance companies offer the same deductible options

The table below provides average rates by state for various deductibles based on a policy with $300,000 in dwelling coverage and $100,000 in liability, up to a $5,000 deductible for home insurance, which generally results in the lowest rates.

State	$500	$2,000	$2,500	$3,000	$4,000	$5,000
Alaska	$113	$148	$178	$241	$329	$352
Alabama	$269	$304	$312	$393	$680	$703
Arkansas	$250	$365	$424	$468	$835	$851
Arizona	$151	$236	$269	$326	$539	$547
California	$109	$145	$166	$194	$285	$313
Colorado	$219	$367	$392	$468	$1,111	$1,130
Connecticut	$206	$207	$231	$288	$473	$477
Washington, D.C.	$160	$138	$146	$182	$265	$277
Delaware	$83	$128	$132	$148	$200	$213
Florida	$240	$287	$296	$296	$449	$454
Georgia	$237	$223	$243	$306	$578	$586
Hawaii	$56	$27	$34	$37	$64	$65
Iowa	$283	$262	$282	$327	$513	$533
Idaho	$182	$231	$246	$318	$496	$497
Illinois	$204	$270	$314	$343	$659	$676
Indiana	$179	$272	$341	$385	$648	$664
Kansas	$419	$463	$524	$599	$971	$1,052
Kentucky	$195	$295	$350	$372	$662	$674
Louisiana	$111	$194	$206	$245	$327	$357
Massachusetts	$183	$156	$186	$217	$364	$365
Maryland	$173	$210	$256	$292	$489	$489
Maine	$142	$155	$189	$180	$271	$272
Michigan	$266	$296	$345	$373	$704	$719
Minnesota	$257	$254	$294	$330	$535	$550
Missouri	$302	$341	$382	$433	$700	$721
Mississippi	$232	$387	$454	$395	$897	$927
Montana	$218	$298	$389	$426	$793	$801
North Carolina	$280	$351	$526	$575	$709	$847
North Dakota	$209	$228	$254	$303	$469	$487
Nebraska	$309	$391	$492	$528	$951	$1,013
New Hampshire	$118	$129	$137	$177	$262	$262
New Jersey	$148	$154	$169	$184	$280	$290
New Mexico	$144	$213	$213	$219	$297	$328
Nevada	$143	$148	$164	$195	$306	$338
New York	$199	$196	$203	$232	$382	$406
Ohio	$161	$194	$244	$285	$471	$490
Oklahoma	$419	$608	$673	$779	$1,282	$1,316
Oregon	$112	$156	$163	$229	$327	$330
Pennsylvania	$180	$240	$284	$329	$545	$584
Rhode Island	$128	$194	$211	$223	$400	$408
South Carolina	$213	$248	$312	$324	$534	$602
South Dakota	$278	$320	$346	$411	$618	$657
Tennessee	$208	$330	$409	$476	$719	$754
Texas	$281	$467	$551	$414	$970	$1,038
Utah	$120	$156	$152	$203	$293	$306
Virginia	$137	$165	$212	$226	$368	$377
Vermont	$82	$117	$141	$150	$236	$246
Washington	$138	$215	$225	$331	$478	$485
Wisconsin	$125	$131	$147	$179	$298	$306
West Virginia	$117	$164	$191	$238	$362	$371
Wyoming	$158	$183	$193	$252	$396	$415

Read our methodology

What is a good deductible for home insurance?

The average homeowners insurance deductible, according to insurers like Liberty Mutual and American Family, is $1,000, but there are plenty of options. A higher deductible means you'll pay less for home insurance, and if you don't file a claim, you keep that money. However, a lower deductible is easier to afford, and if you have more than one claim, you'll have to pay it again.

Pros of a higher deductible

If you choose a high deductible amount, you can reduce the amount you pay for coverage. In other words, you can reduce your annual premium.
Deductibles are paid only when you file a claim, and the average homeowner makes a claim only once every 10 years, according to David Shaffer, vice president at Heffernan Brignole Insurance Services. Set aside some money over those years in case you need to pay the deductible in the future.
If you don't file a claim, the money stays in your pocket.

Cons of a higher deductible

If you file a claim, you will be required to pay the deductible out-of-pocket.
You have to pay the deductible every time you file a claim, so if you have multiple claims you'll pay that deductible more than once.

Why does having a higher deductible lower your insurance premiums?

A higher deductible reduces your premium because you take on more of the financial responsibility in a claim and reduce the financial risk to the insurance company. You're less likely to file small claims.

If your house sustains $3,000 worth of damage, you're not likely to file a claim if your deductible is $2,500. If your deductible is $500, there's a greater chance you'll file a claim to get the balance paid by your insurer.

Shaffer recommends selecting the highest deductible you can afford.

For more details on how to choose the right deductible for your particular situation, read our guide to selecting home insurance deductibles. Additionally, you can compare rates by ZIP code for various coverage levels by using our average home insurance rate tool.

People ask

Is it better to have a high or low deductible for home insurance?

It's best to have a deductible that you can afford. While a high deductible will save you money on premiums, it's important to balance that with what you can afford to pay if you file a claim.

How does the home insurance deductible impact a claim?

The deductible impacts how much you will get when you file a claim, and whether filing a claim is even worthwhile, since claims below the deductible won't be covered.

Having a higher deductible raises the minimum limit for filing a claim. Since you won't get a settlement for anything at or under the deductible, you won't file those smaller claims.

HOW A DEDUCTIBLE IMPACTS A CLAIM: EXAMPLE

Tyra carries a $1,500 homeowners insurance deductible. A window in her home is broken during a storm, and it will cost $1,800 to repair.

She can file an insurance claim. The damage is covered and it's above her deductible. However, she'll only get $300 from the insurance company and have to pay the rest herself.

Since Tyra knows filing a claim will likely raise her rates, costing her more in the long run than the extra $300, she decides against filing a claim and pays for the repair in full.

"My message is that consumers need to proactively prevent small losses from happening since they are going to cover them if they do occur, pocket the savings over all of the years they will own a home, and truly view one's home insurance policy as a consumer product to cover major losses," Shaffer says.

Some insurance companies only allow deductibles up to $1,000. In those cases, he recommends shopping for a home insurance policy from a company that allows much higher deductibles.

Methodology

National and state home insurance averages are based on the following parameters:

$300,000 in dwelling coverage
$300,000 in liability coverage
A $1,000 deductible
A 2% hurricane deductible in applicable states
Good credit

Additionally, we receive rates for dwelling coverages of:

$200,000
$400,000
$600,000
$1,000,000

We also gather data for:

$100,000 in liability coverage
Deductibles ranging from $500 to $5,000

Learn more about our data and methodology.

FAQ: Home insurance deductibles

What is the best deductible for home insurance?

The best home insurance deductible is the one that balances what you can afford to pay out of pocket if you file a claim with what you want to pay annually for your home insurance. That differs from person to person.

What is the highest deductible for homeowners insurance?

The highest available deductible ranges from $2,500 to $5,000, depending on the company. Some carriers offer percentage deductibles based on the dwelling coverage that can be much higher; with a 2% deductible, a $500,000 policy would have a $10,000 deductible.

What are deductibles for natural disasters?

Natural disaster deductibles are home insurance deductibles that apply only to that particular peril. The most common is a hurricane or windstorm deductible, used in 19 states, that applies only to damage from certain storms: hurricanes, named storms, or windstorms, depending on the language in the policy. Hail deductibles are common in Midwest states. Flood and earthquake insurance are separate policies with their own deductibles.

What types of claims does the home insurance deductible apply to?

The homeowners insurance deductible applies to the dwelling coverage and personal property coverage. Personal liability coverage and medical payments coverage do not have deductibles.

Helpful home insurance tools and calculators