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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 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 rates are estimated rates current as of: Thursday, January 15 at 11:00 AM PST
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$242
New Hampshire$914
Vermont$1,034
Iowa$1,042
Delaware$1,091
Washington D.C.$1,171
New Jersey$1,247
Nevada$1,267
Pennsylvania$1,286
New York$1,386
Virginia$1,421
Oregon$1,443
New Mexico$1,529
Maine$1,568
Washington$1,628
West Virginia$1,705
Ohio$1,739
Wisconsin$1,743
Connecticut$1,757
Utah$1,864
Idaho$1,934
Michigan$2,022
California$2,037
Massachusetts$2,101
Maryland$2,153
Arizona$2,196
Montana$2,264
Minnesota$2,431
Indiana$2,482
Tennessee$2,517
Illinois$2,557
Wyoming$2,572
Florida$2,642
South Carolina$2,718
United States$2,755
North Dakota$2,792
South Dakota$2,952
Missouri$3,184
Colorado$3,200
Alabama$3,209
Mississippi$3,443
Kentucky$3,448
North Carolina$3,541
Georgia$3,547
Arkansas$3,571
Texas$4,085
Kansas$4,173
Oklahoma$4,825
Nebraska$5,152
Louisiana$5,693
The below rates are estimated rates current as of: Thursday, January 15 at 11:00 AM PST
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$220
New Hampshire$831
Vermont$940
Iowa$947
Delaware$992
Washington D.C.$1,065
New Jersey$1,133
Nevada$1,151
Pennsylvania$1,169
New York$1,260
Virginia$1,292
Oregon$1,312
New Mexico$1,390
Maine$1,425
Washington$1,480
West Virginia$1,550
Ohio$1,581
Wisconsin$1,585
Connecticut$1,598
Utah$1,694
Idaho$1,758
Michigan$1,838
California$1,852
Massachusetts$1,910
Maryland$1,958
Arizona$1,996
Montana$2,058
Minnesota$2,210
Indiana$2,256
Tennessee$2,288
Illinois$2,324
Wyoming$2,338
Florida$2,402
South Carolina$2,471
United States$2,505
North Dakota$2,538
South Dakota$2,684
Missouri$2,894
Colorado$2,909
Alabama$2,917
Mississippi$3,130
Kentucky$3,134
North Carolina$3,219
Georgia$3,224
Arkansas$3,246
Texas$3,714
Kansas$3,794
Oklahoma$4,386
Nebraska$4,684
Louisiana$5,175
The below rates are estimated rates current as of: Thursday, January 15 at 11:00 AM PST
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Wyoming$291
Maine$895
Vermont$961
Montana$1,024
New Jersey$1,128
South Dakota$1,161
Pennsylvania$1,256
Delaware$1,278
Washington$1,280
Washington D.C.$1,309
Wisconsin$1,355
New York$1,380
Nevada$1,381
Massachusetts$1,463
Oregon$1,463
Virginia$1,472
Maryland$1,627
New Hampshire$1,634
Utah$1,641
West Virginia$1,658
Idaho$1,671
Hawaii$1,895
Ohio$1,931
Illinois$2,013
Indiana$2,032
Minnesota$2,069
Arizona$2,133
Michigan$2,273
Connecticut$2,331
Georgia$2,396
South Carolina$2,448
Arkansas$2,500
California$2,550
United States$2,579
Colorado$2,607
Mississippi$2,670
Iowa$2,711
Missouri$2,810
North Carolina$2,829
North Dakota$2,942
Tennessee$2,953
Nebraska$2,987
New Mexico$3,080
Alabama$3,175
Kentucky$3,204
Kansas$3,512
Texas$4,475
Oklahoma$4,653
Louisiana$5,328
Florida$5,701
The below rates are estimated rates current as of: Thursday, January 15 at 11:00 AM PST
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$187
New Hampshire$706
Vermont$799
Iowa$805
Delaware$843
Washington D.C.$905
New Jersey$963
Nevada$979
Pennsylvania$993
New York$1,071
Virginia$1,098
Oregon$1,115
New Mexico$1,181
Maine$1,211
Washington$1,258
West Virginia$1,318
Ohio$1,344
Wisconsin$1,347
Connecticut$1,358
Utah$1,440
Idaho$1,495
Michigan$1,562
California$1,574
Massachusetts$1,623
Maryland$1,664
Arizona$1,697
Montana$1,749
Minnesota$1,879
Indiana$1,918
Tennessee$1,945
Illinois$1,976
Wyoming$1,988
Florida$2,042
South Carolina$2,100
United States$2,129
North Dakota$2,158
South Dakota$2,281
Missouri$2,460
Colorado$2,473
Alabama$2,480
Mississippi$2,661
Kentucky$2,664
North Carolina$2,736
Georgia$2,741
Arkansas$2,759
Texas$3,157
Kansas$3,225
Oklahoma$3,728
Nebraska$3,981
Louisiana$4,399
The below rates are estimated rates current as of: Thursday, January 15 at 11:00 AM PST
State
sort ascsort desc
Average Annual Premium
sort ascsort desc
Hawaii$176
New Hampshire$665
Vermont$752
Iowa$758
Delaware$794
Washington D.C.$852
New Jersey$907
Nevada$921
Pennsylvania$935
New York$1,008
Virginia$1,033
Oregon$1,050
New Mexico$1,112
Maine$1,140
Washington$1,184
West Virginia$1,240
Ohio$1,265
Wisconsin$1,268
Connecticut$1,278
Utah$1,356
Idaho$1,407
Michigan$1,470
California$1,481
Massachusetts$1,528
Maryland$1,566
Arizona$1,597
Montana$1,646
Minnesota$1,768
Indiana$1,805
Tennessee$1,831
Illinois$1,859
Wyoming$1,871
Florida$1,922
South Carolina$1,977
United States$2,004
North Dakota$2,031
South Dakota$2,147
Missouri$2,315
Colorado$2,328
Alabama$2,334
Mississippi$2,504
Kentucky$2,507
North Carolina$2,575
Georgia$2,579
Arkansas$2,597
Texas$2,971
Kansas$3,035
Oklahoma$3,509
Nebraska$3,747
Louisiana$4,140

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 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.

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