Updated: June 30, 2025
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A home insurance deductible ranges from $500 to $2,000, but it can also be a percentage of your policy's total insurance amount.
The higher the deductible, the lower your premiums and vice versa.
Choosing a deductible should be based on your financial situation, claims history and the value of your insured items.
Your home insurance deductible is the amount you pay before insurance covers a claim. Most policies set this as a specific dollar amount (usually $500, $1,000, $1,500 or $2,000), though some use a percentage of your total coverage instead. You'll establish the deductible with your provider when purchasing your policy, though you can usually change it while your coverage is active.
The best deductible for home insurance depends on your personal finances, risk tolerance and how often you expect to file a claim. Generally, higher deductibles mean lower monthly premiums — but more out-of-pocket costs if something goes wrong.
For example, if a storm causes $5,000 in damage and your deductible is $1,000, you’d pay that amount before your insurer covers the remaining $4,000. If your deductible were $2,500 instead, you’d pay more upfront, but your annual premium would likely be lower.
Many homeowners go with a $1,000 deductible, which often balances affordability and coverage. But if you have a healthy emergency fund, raising your deductible to $2,500 or more could be a smart way to cut your insurance bill.
The right deductible for your insurance policy depends on your needs. Your deductible should balance your immediate out-of-pocket costs with your long-term insurance premiums. It should reflect your financial stability and risk tolerance.
Choose a higher deductible if your savings can cover the out-of-pocket costs when filing a claim. If you have limited savings, a lower deductible might be more suitable.
Consider how often you might file a claim. If you live in an area prone to natural disasters, a lower deductible might be more practical despite higher premiums.
Evaluate the value of the property or item you're insuring. Higher-value homes may benefit from lower deductibles to ensure greater coverage when damage occurs.
Higher deductibles can mean significant premium savings over time, but you need to be prepared for sudden large expenses.
If you rarely file claims, consider a higher deductible since you're less likely to pay the out-of-pocket cost.
A deductible is the amount you pay out of pocket before your insurer pays anything For example, with a $1,000 deductible, you write a check for $1,000 and insurance handles the other $4,000. Think of a deductible as your share of the bill.
Insurance companies use deductibles for three main reasons:
A home insurance policy with $100,000 in dwelling coverage and a $500 deductible costs an average of $1,635 per year, while the same policy with a $1,500 deductible costs $1,441 per year. Generally, a higher deductible leads to lower monthly premiums and vice versa.
The table below shows how rates vary by coverage and deductible.
| $500 | $2,821 |
| $1000 | $2,614 |
| $1500 | $2,479 |
| $2000 | $2,334 |
Choosing the right homeowners insurance deductible depends on your financial situation and risk tolerance. Insurers weigh factors such as location, home value and claim history when setting your premium. To strike the right balance between monthly cost and out-of-pocket risk, compare quotes from multiple providers and consider how much you could afford to pay upfront in the event of a claim.
Find answers to common questions about home insurance deductibles.
Whether a $500 or $1,000 deductible is better depends on your financial situation and risk tolerance. With $500, you'll pay more each month but less when trouble hits. With $1,000, your monthly bill drops but you'll shell out more if you need to use your coverage.
A deductible is the amount you pay out-of-pocket before your insurance company covers the costs of a claim. It's agreed upon when you purchase your policy and affects both your premium costs and financial responsibility when filing a claim.
A $2,500 deductible can be a smart choice if you have a strong emergency fund and want to lower your premium. However, it means higher out-of-pocket costs when you file a claim, so it's best for homeowners who don't expect to file frequent claims and can afford the upfront expense.
MoneyGeek analyzed quotes from multiple insurance providers across the U.S. using a profile that reflects the average homeowner. By considering different locations and companies, we aim to give a reliable estimate of what homeowners can expect to pay — showing why it’s important to compare rates.
Homeowner Profile
For our analysis, we created a sample homeowner profile with the following characteristics:
Homeowners Insurance Coverage Details
Unless otherwise specified, we used the following coverage limits to collect quotes for our comparison:
We also compiled data for policies with broader coverage to determine the best companies for insuring expensive homes, upping limits to $1 million in dwelling coverage, $500,000 in personal property coverage and $1 million in liability coverage.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
