Your deductible is the amount you pay in a home insurance claim before your insurer covers the remainder, up to your policy limits. The deductible you choose has a direct impact on your premium, so it's important to make an educated choice. Knowing how a deductible works helps keep as much money in your pocket as possible.

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What is a home insurance deductible?

When you file a claim, your deductible is the amount agreed upon with your home insurer that you're required to pay. Once your deductible limit is met, your home insurer pays the rest of the claim amount up to your home insurance policy limit.

The deductible amount will be subtracted from the total claim payout your home insurance provider gives you. For instance, if you file an $8,000 home insurance claim and your deductible is $1,000, your home insurer will cut you a check for $7,000.

A home insurance deductible amount is either a preset dollar amount or a percentage of your home insurance policy value. Once it's selected, the deductible is locked in for the time you have the home policy.

Types of homeowners insurance deductibles

There are two types of home insurance deductibles, a dollar-amount deductible and a percentage deductible.

Dollar-amount deductible

A dollar-amount deductible is also known as a flat deductible. It is a fixed amount you pay every time you file a home insurance claim. The most common home insurance deductibles offered on average are $500, $1,000 and $1,500. A $1,000 deductible tends to be the most common choice. If you bump your deductible from $500 to $1,000, you can save an average of $123 on your annual home insurance premium. 

Percentage deductible

A percentage deductible is based on a percentage of your home's insured value. If your home is insured for $500,000 and you have a 1% deductible, that means you will have $5,000 subtracted from any home claim payout. This is higher than what you'd have to pay with a dollar-amount deductible. Percentage deductibles are often used for disaster deductibles, such as wind deductibles.

How a deductible affects your premium

Selecting a higher deductible will lower your premium, while a lower deductible will increase your premium. Based on our research, increasing your deductible from $500 to $2,000 can save you $320 a year.

Deductible Average annual rate
$500 $1,877
$1,000 $1,754
$1,500 $1,649
$2,000 $1,557
Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.

Deductible rates also vary between insurance companies. The table below shows how your rates can change based on the deductible amount and your insurance company.

Insurance company $500 deductible $1,000 deductible $1,500 deductible $2,000 deductible






American Family















State Farm










Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. States used for averages include Arizona, Georgia, Arkansas and Illinois. Your rates may vary.

How do I pick the right home insurance deductible?

When picking the home insurance deductible that's right for you, you should consider what deductible you can afford if you have to file a claim. As noted before, the higher your deductible, the lower your home insurance premium.

Consider a high deductible as a short-term expenditure toward long-term savings. The average homeowner makes a home insurance claim once every 10 years. If you can stay within that average, you should see a net savings over time. If you decide to have a high deductible, then we recommend setting aside money for the deductible in the event of a claim.

We recommend choosing a lower deductible if you don't want to pay a large deductible all at once. If you also live in an area that is prone to theft, vandalism or other covered perils, then a lower deductible may be beneficial.

Disaster deductibles

Depending on where you live, your home insurance may involve weather-specific deductibles that you will have to pay instead of your standard deductible in the event of a trigger event. Hurricane deductibles and wind/hail are the two common ones that homeowners should be aware of when shopping for home insurance.

Hurricane deductibles

Some states, especially along the East Coast and in the Midwest, have a higher rate of hurricanes than many other parts of the country. In these states, a hurricane deductible can apply to damage claims in the event of one.

Whether or not this deductible is in effect depends on certain triggers set by your home insurer. The most common hurricane deductible triggers include:

  • The National Weather Service officially names the hurricane (i.e. Hurricane Harvey, Hurricane Irma)
  • The National Weather Service issues a hurricane watch or warning

Hurricane deductibles are calculated by a percentage of your home insurance policy limit. This deductible can be much higher than your standard deductible, especially if you have a flat deductible on your home policy.

In some states, home insurers give their policyholders the option of a flat deductible in return for a higher premium. Home insurers in very high-risk coastal areas tend to make the percentage deductible mandatory, however.

Wind/hail deductible

Wind/hail deductibles are common in Midwestern states where extreme windstorms and hail happen frequently. While there are some flat wind/hail deductibles, they tend to be percentage-based and usually fall between 1% and 5% of your home insurance policy limit.

Flood deductible

Flood insurance deductibles vary by state. Your lender may set a cap for your deductible amount. There are two separate deductibles that apply to building and contents coverage. A building deductible refers to the structure of your home, while a contents coverage deductible refers to your personal belongings. If both your building and personal belongings are damaged from a flood, then both deductibles would be applied.

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