Deductible vs Premium Calculator
Choosing a higher deductible lowers your premium but increases your out-of-pocket cost when you file a claim. This calculator helps you compare the total cost at different deductible levels based on how likely you are to file a claim.
Compare Deductible Options
Premium reductions are estimates based on industry averages. Actual savings vary by insurer and policy type. Higher deductibles may not be appropriate if you cannot afford the out-of-pocket cost at claim time.
How Deductibles Affect Premiums
Insurance companies offer lower premiums for higher deductibles because the policyholder assumes more risk. The relationship is not linear — the biggest savings come from moving from a very low deductible to a moderate one.
| Deductible Change | Typical Premium Savings |
|---|---|
| $250 → $500 | 10–15% |
| $500 → $1,000 | 15–25% |
| $1,000 → $2,500 | 10–15% |
| $2,500 → $5,000 | 5–10% |
Frequently Asked Questions
When does a higher deductible make sense?
A higher deductible is generally better if you have an emergency fund that can cover the deductible amount, you have a low claims history, and you want to reduce your monthly costs. It is especially advantageous if you rarely file claims — you save on premiums every year but only pay the deductible when something happens.
Should I always choose the lowest deductible?
Not necessarily. A very low deductible means high premiums. If you go several years without a claim, you may pay thousands more in premiums than you would have saved with the lower deductible. The calculator above helps you model this tradeoff.
Does my deductible apply to every claim?
Yes, for most property and auto policies, the deductible applies per claim. If you have two separate incidents in one year, you pay the deductible twice. Some health insurance policies have annual deductibles that accumulate across all claims in a year.