Your deductible is the amount you pay before home 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.
What Is the Average Deductible for Homeowners Insurance?
Updated: November 27, 2025
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Key Takeaways
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.
What Is the Average Deductible for Homeowners Insurance?
What Is the Best Deductible for Home Insurance?
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.
Before you decide between a $500 vs. $2,000 deductible, it’s smart to see how top-rated providers stack up; the best home insurance companies often differ on pricing at each deductible level.
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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.
How to Choose a Deductible for Home Insurance
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.
Financial Situation
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.
Claim Frequency
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.
Value of Insured Item
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.
Long-term Financial Impact
Higher deductibles can mean significant premium savings over time, but you need to be prepared for sudden large expenses.
History of Claims
If you rarely file claims, consider a higher deductible since you're less likely to pay the out-of-pocket cost.
How Does a Homeowners Insurance Deductible Work?
You pay your deductible before your insurance company covers the rest. Say you file a $5,000 claim with a $1,000 deductible; you pay the first $1,000, and your insurer pays the remaining $4,000.
Insurance companies use deductibles to:
- Share financial responsibility: When you cover part of each claim, you're less likely to file for minor damage. This helps keep premiums lower for everyone.
- Reduce claim processing costs: Small claims are expensive to handle. Deductibles filter out losses you can afford to cover yourself.
- Encourage property maintenance: Knowing you'll pay out of pocket for damage motivates you to maintain your home and prevent losses.
Average Cost of Home Insurance by Deductible
For a policy with $100,000 in dwelling coverage, you'll pay an average of $1,635 annually with a $500 deductible or $1,441 annually with a $1,500 deductible. Higher deductibles mean lower premiums; in this case, tripling your deductible saves you $194 per year.
To gauge potential savings from a higher deductible, compare it to the average cost of home insurance for homes similar to yours. If you rarely file claims, the savings from a higher deductible can offset the extra out-of-pocket cost when you do.
The table below shows how rates vary by coverage and deductible.
Data filtered by:
$250K Dwelling / $125K Personal Property / $200K Liability
| $500 | $2,821 |
| $1000 | $2,614 |
| $1500 | $2,479 |
| $2000 | $2,334 |
Typical Homeowners Insurance Deductible: Bottom Line
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.
Homeowners Insurance Deductible Average: FAQ
Find answers to common questions about home insurance deductibles.
Is a $500 or $1,000 deductible better?
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.
What is the deductible for insurance?
Your deductible is what you pay before insurance covers the rest of a claim. You choose this amount when buying your policy. Higher deductibles lower your premium but increase what you pay when filing a claim.
Is a $2,500 deductible good for home insurance?
A $2,500 deductible works well if you have savings to cover it and rarely file claims. You'll pay lower premiums, but you need that cash available when damage occurs. This option suits homeowners who can handle the upfront cost and want to reduce their monthly insurance expenses.
Best Deductible for Home Insurance: Our Review Methodology
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:
- Good credit score (769–792)
- Home constructed in 2000
- Wood-frame construction
- Composite shingle roof
Homeowners Insurance Coverage Details
Unless otherwise specified, we used the following coverage limits to collect quotes for our comparison:
- $250,000 in dwelling coverage
- $125,000 in personal property coverage
- $200,000 in personal liability coverage
- $1,000 deductible
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.
Normal Deductible for Home Insurance: Related Articles
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!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.