Deductible vs Premium Calculator
Should you raise your deductible to lower your premium? Use this calculator to compare options and find your break-even point.
Deductible vs Premium Calculator
Compare how different deductible levels affect your total insurance costs over time. Higher deductibles mean lower premiums—but more out-of-pocket when you file a claim.
Your Results
Annual Premium Savings
per year with higher deductibleAdditional Risk per Claim
$0
more out-of-pocket per claimBreak-Even Analysis
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| Scenario | Current ($ ded) | Alternative ($ ded) | Difference |
|---|---|---|---|
| Total Premiums ( years) | $0 | $0 | $0 |
| Expected Claims Cost | $0 | $0 | $0 |
| Total Expected Cost | $0 | $0 | $0 |
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Note: This calculator provides estimates based on your inputs. Actual costs depend on claim amounts, policy terms, and factors not captured here. Always review your policy details and consider your financial situation before changing coverage.
Understanding Deductibles and Premiums
The Tradeoff
Insurance pricing involves a fundamental tradeoff:
- Higher deductible = Lower premium, but more out-of-pocket when you claim
- Lower deductible = Higher premium, but less out-of-pocket when you claim
The right choice depends on:
- How often you file claims
- Whether you can afford a higher deductible
- Your risk tolerance
Common Deductible Options
| Insurance Type | Common Options | Typical Savings (Low to High) |
|---|---|---|
| Auto | $250, $500, $1,000, $2,000 | 10-30% going from $500 to $1,000 |
| Homeowners | $500, $1,000, $2,500, 1% of value | 15-25% going from $500 to $1,000 |
| Health | $500, $1,500, $3,000, $7,000+ | Varies widely by plan |
When Higher Deductibles Make Sense
A higher deductible often saves money if you:
- Rarely file claims (less than once every 3-5 years)
- Have an emergency fund to cover the deductible
- Drive carefully with a clean record
- Own a well-maintained home in a low-risk area
When Lower Deductibles Make Sense
A lower deductible may be worth the extra premium if you:
- File claims frequently
- Would struggle to pay a high deductible unexpectedly
- Have a new driver in the household
- Live in a high-risk area for weather or theft
Tips for Choosing Your Deductible
- Build an emergency fund first - Keep at least your highest deductible saved
- Consider all your policies - You might have different deductibles for auto, home, and health
- Ask about disappearing deductibles - Some insurers reduce your deductible each claim-free year
- Review annually - As your financial situation changes, your ideal deductible may change too
Related Guides
- Auto Insurance Coverage Guide
- Home Insurance Coverage Guide
- Auto Insurance Coverage Calculator
- Life Insurance Needs Calculator
Data Sources
Deductible and premium savings estimates in this calculator are based on industry data from III (opens in new tab) (Insurance Information Institute), NAIC (opens in new tab) rate studies, and insurer rate filings. Learn more about our data collection methods on our Methodology page.
Frequently Asked Questions
Should I choose a higher deductible to save money?
It depends on your claim frequency and ability to pay the deductible. Higher deductibles lower your premium, but you pay more out-of-pocket when you file a claim. If you rarely file claims and can afford a higher deductible, you’ll likely save money overall.
How much can I save by raising my deductible?
Raising your auto or home deductible from $500 to $1,000 typically saves 10-25% on premiums. The exact savings depend on your insurer, coverage type, and other factors. Use our calculator to compare your specific options.
What's a break-even point for deductibles?
The break-even point is how many claims it takes for a higher deductible to cost more than the premium savings. For example, if raising your deductible saves $200/year but costs $500 more per claim, you’d break even at 2.5 claims over 5 years.
Can I afford a higher deductible?
Only raise your deductible to an amount you can comfortably pay out-of-pocket when needed. Many financial advisors suggest keeping at least your deductible amount in an emergency fund. Don’t choose a $2,000 deductible if you’d struggle to pay it after an accident.
Does raising my deductible affect my coverage?
No, your deductible only affects how much you pay before insurance kicks in. Your coverage limits, what’s covered, and your insurer’s obligations remain the same regardless of deductible level.
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