About the Insurance Deductible Comparison Calculator
This deductible comparison calculator answers a common insurance question: is it worth raising your deductible to lower your premium? Enter the deductible and yearly premium for two options — from an auto, home, renters or health quote — and how often you expect to make a claim. It shows the yearly premium savings, the extra amount you would pay out of pocket per claim, the expected yearly cost of each option and how many years without a claim it takes to break even.
Use it at renewal, when comparing quotes, or when you have built up an emergency fund large enough to cover a bigger deductible. If you rarely claim, a higher deductible usually saves money over time; if you claim often, the extra out-of-pocket cost can outweigh the premium savings.
The comparison assumes every claim is larger than the higher deductible, so each claim costs you the full deductible difference. Smaller losses that you would not claim anyway make the higher deductible look even better. Claim frequency is an average — 0.1 means one claim every ten years.
With the default inputs, the expected yearly saving with higher deductible is $150.00. Change any value above to recalculate instantly.
How to use the insurance deductible comparison calculator
- 1Enter the lower deductible and its yearly premium from your quote.
- 2Enter the higher deductible and its yearly premium.
- 3Estimate how often you make a claim, based on your history.
- 4Enter how many years you expect to keep the policy.
- 5Compare the expected costs and the break-even years between claims.
Formula and method
Each option’s expected yearly cost is its premium plus the deductible you would pay times the average number of claims per year. The difference between the two is the expected yearly saving from choosing the higher deductible; multiplying by the number of years gives the expected saving over the period.
The break-even time divides the extra deductible you would pay on one claim by the yearly premium saving. If you typically go longer than that between claims, the higher deductible comes out ahead. The table shows actual totals for zero, one, two or more claims over the period, assuming each claim exceeds the higher deductible.
- Premium
- Yearly premium for each deductible option
- Claims per year
- Average claim frequency (0.1 = one per decade)
- Deductible
- Amount you pay per claim before coverage
Worked examples
Auto policy: $500 vs $1,000 deductible
Raising the deductible saves $200 a year and costs $500 more per claim, so you break even if you go 2.5 years between claims. At one claim every ten years the expected saving is $200 − $50 = $150 a year, or $1,500 over ten years.
$250 vs $1,000 with a claim every four years
The premium saving is $250 a year and each claim costs $750 more, a 3-year break-even. With a claim every 4 years, the expected saving is $250 − $187.50 = $62.50 a year — small, but still positive.
Frequent claims: homeowners $1,000 vs $2,500
Saving $250 a year does not make up for $1,500 more per claim if you claim every other year: the higher deductible costs $750 more in expected deductibles, a net loss of $500 a year.
Frequently asked questions
Is a higher deductible worth it?+
A higher deductible is usually worth it if you rarely file claims and can comfortably pay the deductible from savings. Divide the extra deductible by the yearly premium saving: if you typically go longer than that many years between claims, the higher deductible saves money.
How much can raising my deductible save?+
Savings vary by insurer and coverage. Get quotes at two or three deductible levels and compare the premium difference — that, not a rule of thumb, is what this calculation needs.
What is a deductible break-even point?+
It is the number of claim-free years needed for the premium savings to cover the extra out-of-pocket cost of one claim at the higher deductible. For example, $500 more per claim and $200 a year in savings is a 2.5-year break-even.
Should I file small claims at all?+
Small claims just over the deductible can raise future premiums or count against claim-free discounts. Many people pay minor losses themselves, which is another reason a higher deductible often makes sense.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.