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What Is a Deductible in Homeowners Insurance?

Home insurance deductibles typically range from $500 to $2,000.

Danny Smith
Written byDanny Smith
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Danny SmithInsurance Writer
  • Licensed auto and home insurance agent

  • 4+ years in content creation and marketing

As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

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Katie Powers
Edited byKatie Powers
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Katie PowersLicensed P&C Agent, Senior Insurance Editor
  • Licensed auto and home insurance agent

  • 4+ years experience in insurance and personal finance editing

  • NPN: 20564519

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

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Updated | Reading time: 4 minutes

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A homeowners insurance deductible is the amount you pay out of pocket before your home insurance coverage takes effect after a claim. It’s important to understand your deductible amount, as it’ll affect your insurance premiums and how much you pay after a claim.

Setting a higher deductible will lower your premiums, but you’ll spend more out of pocket after a claim. Having a lower deductible results in higher premiums, but you’ll pay less out of pocket after a claim. The best option for you depends on your needs and financial situation.

Here’s what you need to know about deductibles to help you better understand your homeowners insurance policy.

How home insurance deductibles work

Your home insurance deductible is a set amount of money that you agree upon with your insurer that you’ll pay out of pocket if you file a claim. Your insurance coverage will only kick in once you’ve paid your deductible amount.

For example, if you have a $1,000 deductible and sustain $5,000 in damages, you’ll pay $1,000 and your insurer will pay the remaining $4,000.

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How to select a home insurance deductible

The average home insurance deductible ranges from $500 to $2,000, but in some cases, you have the option to set your deductible as high as $5,000 or even more. In other cases, you can set your deductible as a percentage of your home’s insured value, though this is less common.[1]

When choosing a deductible, try to find a balance between an affordable monthly premium and a deductible you can pay out of pocket without jeopardizing your budget. Consider your home’s value, what coverage you need, your budget, and what level of risk you’re comfortable with before choosing a deductible amount.

A lower deductible will mean higher monthly home insurance premiums, while a higher deductible will result in lower monthly premiums. If you’re willing to take a slight risk and opt for a higher deductible, you could save money on premiums each month. But if you want to avoid a large out-of-pocket payment, you’ll have to pay slightly higher premiums.

Deductible vs. premium

A premium is the amount you pay your insurer for your insurance coverage. You typically have to pay your premiums monthly, but you can also sometimes pay on an annual basis as well. Your chosen deductible has a direct effect on your premium amount, as it changes how much your insurer is on the hook for in the event of a claim.

Premiums and deductibles are inversely related: A high deductible reduces your premium, and a lower deductible increases your premium. With a lower deductible, your insurer will pay more of the claim, so it offsets the costs by charging you higher premiums. With a higher deductible, your insurer won’t pay as much for the claim, so it lowers your premiums.

Average homeowners insurance cost by deductible

Your homeowners insurance premium depends on the deductible you choose. The tables below show average annual premiums by deductible amount.

The below national rates are estimated rates current as of: Sunday, March 1 at 11:00 AM PST. 
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$246
New Hampshire$942
Iowa$971
Vermont$1,087
Washington D.C.$1,098
Delaware$1,181
New Jersey$1,260
Nevada$1,278
Pennsylvania$1,298
New York$1,386
Oregon$1,418
Virginia$1,455
Maine$1,552
New Mexico$1,593
Washington$1,656
West Virginia$1,680
Ohio$1,700
Connecticut$1,722
Wisconsin$1,773
Utah$1,878
Idaho$1,961
Michigan$2,043
California$2,092
Massachusetts$2,101
Maryland$2,167
Arizona$2,170
Minnesota$2,266
Indiana$2,496
Montana$2,500
North Dakota$2,537
Tennessee$2,620
Wyoming$2,627
Florida$2,676
Illinois$2,702
South Carolina$2,758
United States$2,794
Colorado$3,115
South Dakota$3,127
Missouri$3,281
Alabama$3,299
Mississippi$3,429
Kentucky$3,488
Georgia$3,565
North Carolina$3,683
Arkansas$3,780
Texas$4,050
Kansas$4,052
Oklahoma$5,096
Nebraska$5,269
Louisiana$5,680
The below national rates are estimated rates current as of: Sunday, March 1 at 11:00 AM PST. 
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$224
New Hampshire$857
Iowa$883
Vermont$988
Washington D.C.$998
Delaware$1,074
New Jersey$1,145
Nevada$1,162
Pennsylvania$1,180
New York$1,260
Oregon$1,289
Virginia$1,322
Maine$1,411
New Mexico$1,448
Washington$1,505
West Virginia$1,528
Ohio$1,546
Connecticut$1,565
Wisconsin$1,611
Utah$1,708
Idaho$1,783
Michigan$1,858
California$1,902
Massachusetts$1,910
Maryland$1,970
Arizona$1,973
Minnesota$2,060
Indiana$2,269
Montana$2,273
North Dakota$2,307
Tennessee$2,382
Wyoming$2,388
Florida$2,433
Illinois$2,456
South Carolina$2,507
United States$2,540
Colorado$2,832
South Dakota$2,842
Missouri$2,983
Alabama$3,000
Mississippi$3,118
Kentucky$3,171
Georgia$3,241
North Carolina$3,348
Arkansas$3,436
Texas$3,682
Kansas$3,684
Oklahoma$4,633
Nebraska$4,790
Louisiana$5,163
The below national rates are estimated rates current as of: Sunday, March 1 at 11:00 AM PST. 
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Wyoming$298
Maine$886
Vermont$1,010
Montana$1,131
New Jersey$1,140
Washington D.C.$1,227
South Dakota$1,230
Pennsylvania$1,268
Washington$1,301
Wisconsin$1,378
New York$1,380
Delaware$1,384
Nevada$1,394
Oregon$1,437
Massachusetts$1,463
Virginia$1,506
West Virginia$1,634
Maryland$1,638
Utah$1,653
New Hampshire$1,685
Idaho$1,694
Ohio$1,888
Hawaii$1,925
Minnesota$1,929
Indiana$2,044
Arizona$2,108
Illinois$2,127
Connecticut$2,283
Michigan$2,297
Georgia$2,408
South Carolina$2,485
Iowa$2,526
Colorado$2,538
United States$2,615
California$2,620
Arkansas$2,646
Mississippi$2,659
North Dakota$2,673
Missouri$2,896
North Carolina$2,943
Nebraska$3,055
Tennessee$3,074
New Mexico$3,209
Kentucky$3,242
Alabama$3,264
Kansas$3,410
Texas$4,437
Oklahoma$4,915
Louisiana$5,316
Florida$5,774
The below national rates are estimated rates current as of: Sunday, March 1 at 11:00 AM PST. 
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$190
New Hampshire$728
Iowa$750
Vermont$840
Washington D.C.$848
Delaware$913
New Jersey$973
Nevada$988
Pennsylvania$1,003
New York$1,071
Oregon$1,096
Virginia$1,124
Maine$1,200
New Mexico$1,231
Washington$1,279
West Virginia$1,298
Ohio$1,314
Connecticut$1,331
Wisconsin$1,370
Utah$1,452
Idaho$1,515
Michigan$1,579
California$1,617
Massachusetts$1,623
Maryland$1,675
Arizona$1,677
Minnesota$1,751
Indiana$1,929
Montana$1,932
North Dakota$1,961
Tennessee$2,025
Wyoming$2,030
Florida$2,068
Illinois$2,088
South Carolina$2,131
United States$2,159
Colorado$2,407
South Dakota$2,416
Missouri$2,535
Alabama$2,550
Mississippi$2,650
Kentucky$2,695
Georgia$2,754
North Carolina$2,846
Arkansas$2,921
Texas$3,130
Kansas$3,131
Oklahoma$3,938
Nebraska$4,071
Louisiana$4,389
The below national rates are estimated rates current as of: Sunday, March 1 at 11:00 AM PST. 
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$179
New Hampshire$685
Iowa$706
Vermont$790
Washington D.C.$798
Delaware$859
New Jersey$916
Nevada$930
Pennsylvania$944
New York$1,008
Oregon$1,031
Virginia$1,058
Maine$1,129
New Mexico$1,158
Washington$1,204
West Virginia$1,222
Ohio$1,237
Connecticut$1,252
Wisconsin$1,289
Utah$1,366
Idaho$1,426
Michigan$1,486
California$1,522
Massachusetts$1,528
Maryland$1,576
Arizona$1,578
Minnesota$1,648
Indiana$1,815
Montana$1,818
North Dakota$1,845
Tennessee$1,906
Wyoming$1,911
Florida$1,946
Illinois$1,965
South Carolina$2,006
United States$2,032
Colorado$2,266
South Dakota$2,274
Missouri$2,386
Alabama$2,400
Mississippi$2,494
Kentucky$2,537
Georgia$2,592
North Carolina$2,679
Arkansas$2,749
Texas$2,946
Kansas$2,947
Oklahoma$3,706
Nebraska$3,832
Louisiana$4,131

Types of deductibles

Home insurance companies generally offer two types of deductibles: dollar-amount and percentage-based. Dollar-amount deductibles are the more common of the two. This kind of deductible is a specific dollar amount — typically between $500 and $2,000 — that you pay before your coverage kicks in. It applies to just about all home insurance claims your home insurance policy covers, such as fire or theft.

A percentage-based deductible has a set percentage of your home’s insured value. If you have a 2% deductible on a $300,000 home, your deductible amount would be $6,000. Percentage deductibles are more common in areas prone to severe weather and storms, where risks are higher and damage is more costly. If you’re unsure whether this type of deductible is right for you, talk to an insurance agent.

Learn More: How to File a Home Insurance Claim

Learn More: How to File a Home Insurance Claim

What is a disaster deductible?

While homeowners insurance covers many perils, your regular deductible won’t apply for certain damages. For these cases, insurers offer special deductibles that pertain to specific natural disasters that can do extreme property damage, including the following:

  • illustration card https://a.storyblok.com/f/162273/150x150/bc1c474c28/weather-96x96-yellow_045-thunder.svg

    Hurricane

    Hurricane deductibles are typically percentage-based and range anywhere from 1% to 5% of your home’s insured value. These are common in hurricane-prone coastal states and any areas that see severe hurricane damage.

  • illustration card https://a.storyblok.com/f/162273/x/68ed522f01/windstorm-and-hail.svg

    Wind and hail

    A wind and hail deductible can be dollar-amount or percentage-based. Windstorm and hail deductibles are more common in tornado-prone areas and coastal areas that see a lot of severe storms and hail damage.

  • illustration card https://a.storyblok.com/f/162273/150x150/0194b78427/weather-96x96-orange_043-flood.svg

    Flood

    Flood deductibles are typically dollar-amount deductibles. They often accompany flood insurance policies required in some states at high risk for flooding. You can procure flood insurance through private insurers and the National Flood Insurance Program (NFIP).

  • illustration card https://a.storyblok.com/f/162273/x/a0c151e1ba/accidental-tearing-apart-cracking-etc.svg

    Earthquake

    Earthquake deductibles accompany earthquake insurance policies and are typically percentage-based deductibles. They’re most common in earthquake-prone areas like California.[2]

When do you pay your deductible?

You pay your deductible after your insurer approves your submitted claim. Paying your deductible doesn’t typically require you to write a check. Your insurance company simply subtracts your deductible amount from its claim payout.

For instance, if you have $5,000 worth of damage and your deductible is $500, your insurer will send you $4,500. Exactly when you receive your claim payment can vary, but your insurer will typically pay it by the start of repair work.

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Homeowners insurance deductible FAQs

The following information can help answer your remaining questions about how homeowners insurance deductibles work.

  • What is the normal deductible for homeowners insurance?

    The standard deductible for home insurance ranges from $500 to $2,000. A $1,000 deductible is one of the most common deductible options.

  • Is a $2,500 deductible good for home insurance?

    A $2,500 deductible can be good for home insurance if you want to have lower monthly premiums. But you need to make sure you can afford to pay $2,500 out of pocket in the event of a claim before setting a deductible this high.

  • Is a $1,000 deductible good for homeowners insurance?

    Yes. A $1,000 deductible is a good, balanced option for your homeowners policy. It’s a reasonably manageable amount to pay out of pocket in the event of a claim, and it’ll yield you moderate monthly premiums.

  • Is it better to have a $500 deductible or $1,000?

    It depends on your risk level and financial situation. A $500 deductible will result in lower out-of-pocket expenses after a claim, but you’ll pay higher monthly premiums. A $1,000 deductible will lower your homeowners insurance premiums, but you’ll pay more out of pocket after a covered loss. Consider your finances and the likelihood of filing a claim when choosing your deductible amount.

  • Should you file a claim even if your costs don’t exceed your deductible?

    No. If your repair costs don’t exceed your deductible, you shouldn’t file a claim, as your insurance coverage won’t kick in. Filing a claim can actually be harmful, as your insurer may raise your rates due to a perceived increase in risk.[3]

Methodology

Insurify data scientists analyzed rates from more than 180 home insurance companies sourced directly from Insurify’s partner companies and Quadrant Information Services. Rates span all 50 states and Washington, D.C., and quote averages represent the mean price for a given coverage level and geographic area. To ensure data reliability, only insurers meeting minimum quote thresholds were included in the analysis.

Unless otherwise specified, quoted rates reflect the average cost for homeowners with no prior claims and good credit with a home construction year of 1980. The default coverage assumptions include:

Default Coverage Assumptions

  • Dwelling coverage: $300,000
  • Deductible: $1,000
  • Personal property limit: $25,000
  • Liability limit: $300,000

Additional data points beyond these default values are sourced from Insurify’s proprietary database. Rates are updated monthly.

Sources

  1. Liberty Mutual Insurance. "Home Insurance Deductibles: Frequently asked questions (FAQs)."
  2. Insurance Information Institute. "Understanding your insurance deductibles."
  3. Insurance Information Institute. "How to file a homeowners claim."
Danny Smith
Written byDanny SmithInsurance Writer
Photo of an Insurify author
Danny SmithInsurance Writer
  • Licensed auto and home insurance agent

  • 4+ years in content creation and marketing

As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

Featured in

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As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

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Katie Powers
Edited byKatie PowersLicensed P&C Agent, Senior Insurance Editor
Photo of an Insurify author
Katie PowersLicensed P&C Agent, Senior Insurance Editor
  • Licensed auto and home insurance agent

  • 4+ years experience in insurance and personal finance editing

  • NPN: 20564519

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

Featured in

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