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How Much to Make Your Homeowners Insurance Deductible

Choosing the right homeowners insurance deductible depends on your financial situation and personal risk tolerance.

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Making the decision to purchase homeowners insurance can be daunting. But it’s a smart financial move and can also give you peace of mind should any unexpected events happen.

The deductible amount you choose will significantly affect the cost of your homeowners insurance — and your out-of-pocket costs should you ever need to file a homeowners insurance claim. Here are some things to consider when deciding on an appropriate deductible so you can ensure you’re making the best choice possible.

First things first: What is an insurance deductible?

An insurance deductible is the amount of money you must pay out of pocket before your insurance coverage kicks in and begins helping cover the costs associated with a claim.

Good to Know

Deductibles can vary depending on the type of insurance policy and the specific provider. They typically range from $500 to $2,000 for homeowners insurance, though some companies offer higher deductible amounts.

Understanding the different types of insurance deductibles

Here are the various types of deductibles available for homeowners insurance policies.

Standard deductible

A standard deductible is a fixed dollar amount that you must pay before the insurance company will pay out on a covered claim. For example, if your standard deductible is $500 and your roof sustains $5,000 of damage in a windstorm, you must pay the first $500 toward repairs before your insurance company pays the remaining $4,500.

Percentage deductible

A percentage deductible is a variable amount that’s calculated as a certain percentage of your property’s value. For example, if your home is insured for $200,000 and your policy has a 1% deductible, you’d be responsible for $2,000 of any loss.

Split deductible

A split deductible requires the policyholder to pay out different amounts depending on the cause of their claim.

For example, if your policy has a split deductible, you might pay a standard deductible if your home was damaged by fire. But you’d pay a percentage deductible if the damage was from a hurricane.

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What about a disaster deductible?

A disaster deductible is an additional type of insurance deductible that applies to certain natural disasters, such as hurricanes, earthquakes, and tornadoes. Disaster deductibles are usually based on a percentage of your property’s value rather than a fixed amount.

Hurricane deductible

A hurricane deductible is a type of insurance deductible that applies specifically to damage caused by a hurricane. Hurricane deductibles are generally higher than standard home insurance deductibles — usually ranging from 1% to 10% of the home’s value.[1]

Learn More: What Does Hurricane Insurance Cover? 

Wind/hail deductible

A wind/hail deductible is a type of insurance deductible that applies specifically to damage caused by strong winds and hail. Generally, wind/hail deductibles range from 1% to 5% of the home’s value.[2]

Flood deductible

A flood deductible is a type of insurance deductible that applies specifically to damage caused by flooding. This deductible may be calculated as a percentage of your property’s value or a flat dollar amount.[2] It’s important to keep in mind that a standard homeowners insurance policy doesn’t cover flood damage, so you may need to purchase flood insurance separately.

Important Information

You can purchase a flood insurance policy through the National Flood Insurance Program or through a private insurance company.

Earthquake deductible

An earthquake deductible is a type of insurance deductible that applies specifically to damage caused by earthquakes. Earthquake deductibles tend to be higher than other disaster deductibles, usually ranging from 2% to 20% of the home’s replacement value.[2] Similar to flood insurance, a standard homeowners insurance policy doesn’t cover earthquake damage, so you may need to purchase it separately.

How does the deductible you choose affect your premium?

The relationship between deductibles and premiums is important for any homeowner to understand. The higher your deductible, the lower your premium, and vice versa. This means that if you want to get the lowest possible premium, you should opt for the highest deductible.

On the other hand, if you’re willing to pay a higher premium in exchange for lower out-of-pocket costs in the event of a claim, then you may want to choose a lower deductible. Ultimately, deciding what type and amount of deductible to choose depends on your financial situation and risk tolerance.

Check Out: How to File a Home Insurance Claim

Is it ever possible to get your deductible waived?

In certain instances, it’s possible to get your insurance deductible waived. Here are three situations where you may not have to pay a deductible.

Large loss waiver

A large loss waiver is a feature of some insurance policies that releases policyholders from having to pay their deductible if the claim is over a certain amount. If your policy includes a large loss waiver, you wouldn’t have to pay your deductible after a major loss, such as a fire completely destroying your home.

Combined coverage waiver

A combined coverage waiver is an insurance provision that allows the policyholder to avoid paying a deductible if they carry more than one type of policy with the same insurance provider. For example, if you carry your homeowners insurance, auto insurance, and life insurance with the same company, the insurer might waive your deductible the first time you file a claim.

Disappearing deductible

A disappearing deductible — sometimes called a vanishing or diminishing deductible — is a policy provision that rewards policyholders for loyalty or being claim-free. It works by reducing your deductible over time, as long as you remain with the same insurer for a certain period of time or don’t file a claim.

For example, if your policy started with a $1,000 deductible, your insurer might lower your deductible by $100 per year for five years until it reaches $500. However, after you file a claim, your deductible will reset to $1,000.

Keep Reading: Why Do Home Insurance Companies Deny Claims?

How to choose the right deductible for you

When selecting a deductible for your home, you’ll want to consider the following factors:

Is it a standard or percentage deductible?

When selecting a deductible for your homeowners insurance policy, it’s important to know whether it’s a standard or a percentage deductible.

A standard deductible is fixed, meaning the amount of money you must pay out of pocket before the insurer pays for your claim doesn’t change. On the other hand, a percentage deductible is based on a certain percentage of the insured amount, meaning that the amount of money you must pay out of pocket will increase as your coverage amount increases.

What is your tolerable risk level?

An accurate understanding of your risk tolerance is key when selecting the best deductible for your policy. Consider factors such as your budget, the type of coverage you have, and any discounts that may make a higher deductible more attractive if you’re willing to accept more risk.

How much can you afford to pay or cover?

You need to understand your budget and what kind of financial burden you can handle when selecting the best deductible for you.

For example, if coming up with a $1,000 deductible in the event of a claim would be a financial burden, you may want to select a lower deductible — even if it means paying higher premiums annually. On the other hand, if you have a healthy emergency fund and can afford to come up with more money out of pocket in case of a claim, you can lower your premiums by opting for a higher deductible.

By considering all these factors, you can select the most appropriate deductible for your homeowners insurance policy and ensure you’re adequately covered.

Remember, it’s always a good idea to shop around and compare quotes from multiple providers before committing to any policy. This way, you can ensure you get the best coverage for the best price. After all, the cheapest option isn’t necessarily the best one. So take the time to research and find a policy that meets all your needs.

Learn More: Compare Home Insurance Quotes and Rates

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Home insurance deductible FAQs

Here are answers to some frequently asked questions regarding home insurance deductibles to help you make an informed decision when selecting the right deductible for your policy.

  • If the damage to your home is less than your deductible, you may want to avoid filing a claim. Your insurance provider won’t cover a nickel of the damage, but it may still raise your premiums or cancel your policy.

    However, before you decide against filing a claim, make sure you know how much damage there really is because damage to your property can be hard to see. For example, if a tree limb falls on your roof, a cursory roof inspection might not uncover damaged rafters or joists. But if that damage isn’t repaired, it could compromise the structural integrity of your home over time.

    When you file a claim with your insurance company, an adjuster will thoroughly inspect the property and may uncover damage you didn’t realize was there.

  • Most homeowners insurance policies have a minimum deductible of $500. However, selecting a deductible of $1,000, $2,000, or more can lower your premiums. It’s important to select a deductible that suits your budget and risk tolerance to get the most out of your policy.

  • A flat deductible is one that has the same deductible amount regardless of the type or severity of the claim. This means that no matter what type of damage occurs to your property, you’ll pay the same amount out of pocket before your insurer pays any portion of the claim.

  • A $1,000 deductible is the amount of money you must pay out of pocket before your insurance company provides coverage for any damages. For example, if your policy has a $1,000 deductible and the damage to your property is estimated to be $5,000, you must first pay $1,000 before your insurance company covers the remaining $4,000 of damage.

  • An all other perils (AOP) deductible may be included in your policy if you have a split deductible. This is where one deductible applies to hurricane losses while another deductible applies to other types of losses, such as lightning, fire, or theft.[3]


  1. National Association of Insurance Commissioners. "What You Should Know About Named Storm Deductibles." Accessed February 21, 2023
  2. Insurance Information Institute. "Understanding your insurance deductibles." Accessed February 21, 2023
  3. Florida Association of Insurance Agents. "Hurricane Deductibles." Accessed February 21, 2023
Janet Berry-Johnson
Janet Berry-Johnson

Janet Berry-Johnson, CPA is a freelance writer with a background in accounting and income tax planning and preparation. She's passionate about making complicated financial topics accessible to readers. She lives in Omaha, Nebraska with her husband and son and their rescue dog, Dexter. Visit her website at