Raise the Deductible? The Break-Even
Assumptions on sliders · method reviewed September 7, 2026
Weighs the premium a higher deductible saves each year against the extra you would pay on each claim, and finds the claim rate at which the two match. AboutLess
In plain words. A higher deductible lowers the premium every year and costs you more only when you file a claim. The tool takes the two deductibles and the premium at each, works out the saving per year and the extra per claim, and divides one by the other. That gives the break-even, read as one claim every so many years. It then shows where you would stand after the years you choose with no claims, one, and two, and checks whether the higher deductible could be paid from your emergency savings.
Why it matters. Deductibles are usually left where the policy was first written. A few minutes with the premiums at two levels turns a default into a choice, and the choice is often worth a few hundred dollars a year.
An example. Raising a deductible from $1,000 to $2,500 cuts the premium from $2,400 to $2,100. That is $300 saved a year against $1,500 more on each claim, so the break-even is one claim every 5 years. At one claim in ten years, you come out about $150 a year ahead.
Where it stops. The claim rate is a guess, and it decides the answer. The tool does not model premium increases or non-renewal after a claim, which favor the higher deductible, or the chance of two claims in one bad year. Whether the higher deductible could be paid tomorrow matters more than any of the arithmetic. Everything it leaves out.
From the renewal notice or the declarations page.
Ask your agent to quote the same policy at the higher deductible.
The one you are weighing. What you would pay out of pocket on a claim before the policy pays.
Most households file a homeowners claim less than once a decade.
Cash you could pay a claim from tomorrow without borrowing.
The $2,500 deductible could be paid from your $10,000 of emergency savings, so the higher deductible is affordable on a bad day.
- Premium saved each year
- $300
- Saved whether or not you claim
- Extra out of pocket on each claim
- $1,500
- The difference between the two deductibles
- Expected saving each year at your claim rate
- $150
- The premium saved less $150 of expected extra cost
| After | No claims | One claim | Two claims |
|---|---|---|---|
| 1 year | $300 | -$1,200 | -$2,700 |
| 2 years | $600 | -$900 | -$2,400 |
| 3 years | $900 | -$600 | -$2,100 |
| 5 years | $1,500 | $0 | -$1,500 |
| 10 years | $3,000 | $1,500 | $0 |
Small claims cost more than the arithmetic shows. Many insurers raise the premium after a claim and some decline to renew after two, so a deductible high enough to keep small claims off the record is worth more than the premium saving alone. The number that matters most is not the break-even. It is whether the higher deductible could be paid tomorrow.
This is an assumption tool, and every input is yours to set. It treats the premium saving as certain and the claims as arriving at the rate you set, with each claim large enough to reach the higher deductible. It leaves out premium increases and non-renewal after a claim, more than two claims in the period, and what the saved premiums could earn. Method reviewed September 7, 2026. Hypothetical; educational, not advice.
This is a simplified model, not your actual tax return or plan. It only knows what you type in, leaves out rules that may apply to you, and cannot weigh the other facts and trade-offs a real decision depends on. Before you act, talk with a professional who knows your whole situation.
Educational only, not investment, tax, or legal advice. Results are hypothetical estimates that vary with each use and over time and are not guaranteed accurate or complete. Using this tool creates no client relationship with Considerate Capital, and the site that linked here is not affiliated with it. By using it you agree to the tool terms.