Insurance Deductible Calculator

Raising your deductible from $500 to $2,500 typically saves 15-35% on homeowners insurance premium. The question: does the savings justify the higher out-of-pocket when a claim happens? This calculator compares deductibles against expected claim frequency and size.

Current annual premium

Current deductible

Proposed deductible

Premium savings at new deductible

Claims every N years

Average claim size

Expected annual net savings

$90

Premium savings / year

$240

Out-of-pocket increase per claim

$1,500

Probability-weighted extra cost

$150

Years between claims to break even

6.3

Typical claim vs new deductible

Claim exceeds new deductible

How the math works

$1,600 premium at 15% savings = $240/yr saved. Deductible $1,000 → $2,500 = $1,500 more out-of-pocket per claim. Claims every 10 years = $150 annual expected cost. Net $90/yr in your favor. Break-even: 6.25 years between claims.

Key risk check: can you fund the new deductible? $2,500 is manageable for most households. $5,000+ needs liquid reserves. Never raise deductible to a level you can't self-insure.

How to Use

Enter current premium, current deductible, and the new deductible you're considering.
Enter expected premium savings % at the new deductible.
Enter expected claim frequency (once every N years) and average claim size.
See break-even years and expected value of the switch.

Frequently Asked Questions

How much does raising deductible save?

$500 → $1,000: 10-15%. $1,000 → $2,500: 10-20%. $2,500 → $5,000: 10-15%. Most savings come between $500 and $2,500. Above $5K deductible, insurers often require specific underwriting.

What's a typical claim frequency?

Homeowners: 1 claim every 9-10 years for the median property. Coastal/high-risk: every 4-6 years. Rental owners: every 12-15 years. Claims above $5K are 1 every 15-20 years; most claims are smaller.

When does a high deductible backfire?

When you can't fund the deductible. Lost $3,000 of uncovered damage is real cash — if you can't cover it without financial stress, stick with a lower deductible. Insurance is risk transfer; don't retain risk you can't absorb.

Separate wind/hurricane deductible?

Common in coastal areas. Wind deductible is % of insured value (2-5%), separate from main deductible. On a $400K policy, a 3% wind deductible = $12,000. Factor separately when underwriting coverage.