Updated: June 19, 2025
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A home insurance deductible averages $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, along with your history of claims and the value of your insured items.
Home insurance deductibles are typically set at $500, $1,000, $1,500 or $2,000. While deductibles can be a specific dollar amount, they can also be a percentage of the total amount of insurance on the policy. This should be established with your provider at the time of purchase, but you may be able to change it at any point while your insurance 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 it to $2,500 or more could be a smart way to cut your insurance bill.
Choosing the right deductible for your insurance policy depends on your needs, as it should be a balance between your immediate out-of-pocket costs and long-term insurance premiums and reflect your financial stability and risk tolerance.
Assess your current financial stability. Opt for a higher deductible if you have enough savings to cover higher out-of-pocket costs in the event of a claim. Conversely, a lower deductible might be more suitable if you have limited savings.
Reflect on how often you may need to file a claim. A lower deductible might be more practical despite higher premiums if you live in an area prone to events like natural disasters since there's a higher likelihood of filing a claim.
Evaluate the value of the property or item you're insuring. If the value is high, you might opt for a lower deductible to ensure greater coverage.
Think about the long-term implications of your choice. A higher deductible can mean significant savings on premiums over time, but it requires you to be prepared for sudden large expenses.
If you have a history of few or no insurance claims, consider a higher deductible, banking on the likelihood of not needing to make a claim.
Deductibles are a crucial component of many insurance policies, functioning as a form of cost-sharing between the insurance company and the policyholder. This arrangement allows for a more balanced distribution of financial responsibility when a claim is made. There are three general reasons why this system is widely adopted in the insurance industry:
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.
Look at the table below and explore the varying rates 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 weight 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.
Get deeper insight into the average home insurance deductible through our answers to some of the most frequently asked questions.
Whether a $500 or $1000 deductible is better depends on your financial situation and risk tolerance. A $500 deductible will result in higher insurance premiums but lower out-of-pocket costs in the event of a claim, while a $1000 deductible will lower your premiums but require a larger upfront payment when you make a claim.
The deductible for insurance is the amount you, as the policyholder, must pay out-of-pocket before your insurance company begins to cover the costs of a claim. It's a predetermined amount agreed upon when purchasing the policy and can vary depending on the type of insurance and the specific policy terms. Deductibles are integral in determining your premium costs and financial responsibility in case of an insured event.
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.
