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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 Smith
  • 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 PowersSenior Editor
  • Licensed auto and home insurance agent

  • 3+ 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 rates are estimated rates current as of: Tuesday, October 7 at 12:00 PM PDT
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$227
Vermont$933
New Hampshire$988
Washington D.C.$1,082
Delaware$1,204
Nevada$1,257
New Jersey$1,302
Pennsylvania$1,312
New York$1,344
Virginia$1,430
Oregon$1,433
Maine$1,577
Washington$1,591
Connecticut$1,721
Ohio$1,733
Wisconsin$1,744
West Virginia$1,761
Utah$1,785
Idaho$1,853
New Mexico$1,869
California$2,020
Maryland$2,123
Arizona$2,161
Michigan$2,209
Massachusetts$2,217
North Dakota$2,386
Iowa$2,392
Montana$2,400
Minnesota$2,455
Indiana$2,459
Wyoming$2,574
Illinois$2,670
South Carolina$2,717
Florida$2,727
United States$2,763
Tennessee$2,895
South Dakota$3,071
Georgia$3,203
Alabama$3,210
Missouri$3,305
Colorado$3,324
Kentucky$3,347
Mississippi$3,408
Arkansas$3,460
North Carolina$3,864
Texas$3,978
Kansas$4,113
Nebraska$4,860
Oklahoma$4,912
Louisiana$5,604
The below rates are estimated rates current as of: Tuesday, October 7 at 12:00 PM PDT
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$206
Vermont$848
New Hampshire$898
Washington D.C.$984
Delaware$1,095
Nevada$1,143
New Jersey$1,183
Pennsylvania$1,193
New York$1,222
Virginia$1,300
Oregon$1,302
Maine$1,434
Washington$1,447
Connecticut$1,565
Ohio$1,576
Wisconsin$1,585
West Virginia$1,601
Utah$1,623
Idaho$1,684
New Mexico$1,699
California$1,837
Maryland$1,930
Arizona$1,965
Michigan$2,008
Massachusetts$2,015
North Dakota$2,169
Iowa$2,175
Montana$2,181
Minnesota$2,232
Indiana$2,235
Wyoming$2,340
Illinois$2,427
South Carolina$2,470
Florida$2,479
United States$2,511
Tennessee$2,632
South Dakota$2,792
Georgia$2,912
Alabama$2,918
Missouri$3,005
Colorado$3,022
Kentucky$3,043
Mississippi$3,098
Arkansas$3,146
North Carolina$3,513
Texas$3,616
Kansas$3,739
Nebraska$4,418
Oklahoma$4,466
Louisiana$5,094
The below rates are estimated rates current as of: Tuesday, October 7 at 12:00 PM PDT
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Wyoming$239
Maine$860
Vermont$945
Montana$1,088
New Jersey$1,156
Washington D.C.$1,166
Washington$1,230
Pennsylvania$1,240
South Dakota$1,248
Delaware$1,334
Wisconsin$1,336
Oregon$1,347
West Virginia$1,355
Nevada$1,375
Massachusetts$1,399
New York$1,400
Virginia$1,527
New Hampshire$1,549
Maryland$1,553
Utah$1,616
Idaho$1,636
Louisiana$1,704
Hawaii$1,771
Ohio$1,860
Indiana$1,922
Arizona$1,996
Illinois$2,117
Minnesota$2,166
Michigan$2,253
Georgia$2,295
Connecticut$2,307
South Carolina$2,445
Arkansas$2,468
California$2,506
Iowa$2,506
United States$2,556
Colorado$2,575
Mississippi$2,765
Missouri$2,837
North Carolina$2,860
Nebraska$2,873
Tennessee$2,950
New Mexico$3,194
Alabama$3,230
Kentucky$3,365
North Dakota$3,382
Kansas$3,601
Texas$4,317
Oklahoma$4,759
Florida$5,702
The below rates are estimated rates current as of: Tuesday, October 7 at 12:00 PM PDT
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$175
Vermont$721
New Hampshire$764
Washington D.C.$836
Delaware$931
Nevada$971
New Jersey$1,006
Pennsylvania$1,014
New York$1,038
Virginia$1,105
Oregon$1,107
Maine$1,219
Washington$1,230
Connecticut$1,330
Ohio$1,339
Wisconsin$1,348
West Virginia$1,360
Utah$1,380
Idaho$1,432
New Mexico$1,444
California$1,561
Maryland$1,640
Arizona$1,670
Michigan$1,707
Massachusetts$1,713
North Dakota$1,843
Iowa$1,849
Montana$1,854
Minnesota$1,897
Indiana$1,900
Wyoming$1,989
Illinois$2,063
South Carolina$2,099
Florida$2,107
United States$2,135
Tennessee$2,237
South Dakota$2,373
Georgia$2,475
Alabama$2,481
Missouri$2,554
Colorado$2,569
Kentucky$2,586
Mississippi$2,634
Arkansas$2,674
North Carolina$2,986
Texas$3,074
Kansas$3,178
Nebraska$3,756
Oklahoma$3,796
Louisiana$4,330
The below rates are estimated rates current as of: Tuesday, October 7 at 12:00 PM PDT
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$165
Vermont$679
New Hampshire$719
Washington D.C.$787
Delaware$876
Nevada$914
New Jersey$947
Pennsylvania$954
New York$977
Virginia$1,040
Oregon$1,042
Maine$1,147
Washington$1,157
Connecticut$1,252
Ohio$1,260
Wisconsin$1,268
West Virginia$1,280
Utah$1,299
Idaho$1,348
New Mexico$1,359
California$1,469
Maryland$1,544
Arizona$1,572
Michigan$1,606
Massachusetts$1,612
North Dakota$1,735
Iowa$1,740
Montana$1,745
Minnesota$1,786
Indiana$1,788
Wyoming$1,872
Illinois$1,942
South Carolina$1,976
Florida$1,983
United States$2,009
Tennessee$2,105
South Dakota$2,234
Georgia$2,330
Alabama$2,335
Missouri$2,404
Colorado$2,418
Kentucky$2,434
Mississippi$2,479
Arkansas$2,517
North Carolina$2,810
Texas$2,893
Kansas$2,991
Nebraska$3,535
Oklahoma$3,572
Louisiana$4,075

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
Danny Smith

Danny is a Brooklyn-based writer with a producer’s license for property and casualty insurance. A former editor at Insurify, he specializes in auto, home, and pet insurance. He works to translate his insurance expertise into digestible, easy-to-understand content for drivers, homeowners, and pet owners alike.

Danny has been a contributor at Insurify since March 2022.

Katie Powers
Edited byKatie PowersSenior Editor
Photo of an Insurify author
Katie PowersSenior Editor
  • Licensed auto and home insurance agent

  • 3+ 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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