A homeowners insurance deductible is the amount you’re responsible for paying out of pocket before your insurance company will pay on a claim. After you pay your deductible, the claim payment you get from your insurance company is the damage or loss amount minus your deductible.
You choose your deductible at the time you purchase home insurance, but you can change it at any time during your policy term. And the amount you pay in homeowners insurance premiums is directly correlated with how high or low you set your deductible.
A higher deductible typically means lower insurance rates, while a lower deductible means higher insurance rates.
Depending on where you live, your policy may include two types of deductibles: a flat dollar amount — typically $500 to $2,000, and a percentage amount — typically 1% to 5%.
To choose the right deductible amount, you’ll have to weigh what you’re able to afford in policy premiums versus what you’ll be able to afford to pay out of pocket if you file a claim.
If you’re in a comfortable position financially and don’t mind covering small house repairs or losses out of your own pocket, it may be worth considering a high deductible policy.
What is a homeowners insurance deductible?
A homeowners insurance deductible is the amount that you’re responsible for paying out of pocket before your insurance company will pay on a claim. You typically have the option to set your deductible between $500 and $2,000, and sometimes even higher.
The claim check you get from your insurance company is the damage or loss amount covered by insurance minus your deductible.
Here’s an example.
Say a fire causes $50,000 in damage to your house and you have a $1,000 policy deductible. You’ll have to pay $1,000 to your insurer, and then your insurance company should reimburse you $49,000 ($1,000 subtracted from $50,000) for repairs.
You typically pay your deductible on a per-claim basis, meaning if your home is damaged in two different events that were a month apart, you’ll have to pay two separate deductibles on those respective claims. The only exception is Florida, in which the deductible you must pay for hurricane damage is per hurricane season, instead of per claim or per storm.
When do you pay your homeowners insurance deductible?
You pay your deductible when your property damage claim is accepted and you’ve agreed to a claim settlement with your insurance company. You don’t pay your deductible like you would your phone or utility bills — rather, your insurer simply subtracts it from the claim amount.
If your claim is for $10,000 and you have a $500 deductible, you’ll receive a $9,500 claim check from your insurer.
2 types of homeowners insurance deductibles
There are two types of homeowners insurance deductibles:
Flat dollar amount deductibles: For most causes of property damage or loss
Percentage deductibles: For damage from wind/hail, named storms, or hurricanes
In both cases, it’s the amount taken off the top of a claim payment paid out by your insurer. Here’s how they break down:
1. Flat dollar amount deductibles
This is the standard, fixed-dollar amount deductible that you pay out of pocket when you file a claim for a covered property damage loss.
A standard homeowners insurance policy deductible is usually in the range of $500 to $2,000, although lower and higher deductible home insurance plans are also common.
2. Percentage deductibles
Percentage deductibles are specific to wind/hail, named storm, and hurricane-related claims. They’re calculated based on the percentage — usually 1% to 10% — of your home’s insured value (i.e. the dwelling coverage limit in your policy). These deductibles typically only apply if you live in an area that’s high risk for hurricane or wind damage.
If your house is insured for $200,000, for instance, and your policy has a 1% hurricane deductible, $2,000 would be deducted from the claim payment.
Homeowners insurance costs by deductible
Homeowners insurance premiums can vary as much as $1,300 by choosing a $2,000 deductible over a $500 one — according to AGI Progressive rates.
Here's a look at different costs based on different deductible amounts based on our analysis of 2022 home insurance rate data from around the country.
|Company||Rates with a $500 deductible||Rates with a $1,000 deductible||Rates with a $2,000 deductible|
How to choose your homeowners insurance deductible
When choosing your homeowners insurance deductible, you’ll need to take a look at your finances and consider two questions:
Would you rather have lower home insurance rates in the short term and risk higher out-of-pocket expenses if disaster strikes, like if your home is damaged in a fire or burglarized?
Would you rather have more expensive home insurance rates, but less to pay out of pocket when filing a claim?
What does this mean for you?
Basically, if you raise your deductible, you’ll likely cut insurance costs and therefore have less to pay up front. But you’ll be left having to pay more when you file a claim.
According to William Davis of the Insurance Information Institute, limiting your out-of-pocket expenses is virtually the sole reason for choosing a lower deductible policy. Otherwise, it’s up to the policyholder and their circumstances.
"There really aren't any other benefits other than having to pay less out of pocket in the event of a loss," Davis says.
"But policyholders should discuss their individual situation and insurance needs with their company representative or agent to ensure they understand their coverages, the deductibles that are available, and how those things will affect them in the event of a loss."
You might want to consider a higher deductible if …
You have enough savings to cover a thousand or few thousand dollars for your deductible if disaster strikes
You would rather pay lower monthly or upfront annual premiums
You’re comfortable with footing the bill yourself for more minor repairs or personal property replacement
You might want to consider a lower deductible if …
You don’t want to want to risk paying more than around $500 to $1,000 if disaster strikes and you need to file a claim
You also live in an area that is high risk for frequent property damage or theft
You’re more comfortable paying more upfront for insurance premiums and less when you have to file a claim
What is the standard homeowners insurance deductible?
There isn’t a standard home insurance policy deductible, but most home and renters insurers offer a minimum deductible of $500 and $1,000, according to the Insurance Information Institute. 
Most major insurers offer deductibles as high as $2,500 or $5,000, with a few offering even higher deductible plans or optional percentage deductibles as a mechanism for lowering your rates.
What are disaster deductibles?
Deductibles can vary depending on what type of storm caused the damage or loss to your home or personal property. While wind, hail, and hurricane damage are covered by a standard homeowners insurance policy, but a special percentage deductible may kick in depending on the details of your policy and what state you live in.
Hurricane and named storm deductibles
In hurricane-prone regions of the country, like Florida and many oceanside counties on the Atlantic coast, special hurricane deductibles may be “triggered” and applied to named storm or hurricane damage claims. In Florida, you pay a hurricane deductible on a per season basis rather than for each individual storm.
The criteria for what can trigger a named storm or hurricane deductible generally varies from state to state, but insurance companies typically need to wait until a storm or hurricane has been officially declared or named by the National Weather Service.
Davis also notes that deductibles can be a very important issue in hurricane-prone places.
"Policyholders need to determine how their state's hurricane deductibles — which are a percentage of the home's value instead of a set dollar amount (they vary by state) — will impact their ability to handle the total amount they would have to pay out of their own pocket in the event of a loss."
Wind and hail deductibles function very similarly to hurricane deductibles in that they’re paid mostly in percentages rather than fixed-dollar amounts. These types of deductibles are the standard in Tornado Alley (Kansas, Oklahoma, Texas, and Nebraska) and certain Midwestern states like Ohio and Illinois.
Frequently asked questions
How does your deductible affect your homeowners insurance rates?
Raising your deductible can have a significant impact on your homeowners insurance premiums. In general, a higher deductible means cheaper rates, while a lower deductible means higher rates.
Is $2,500 a good home insurance deductible?
As long as you’re comfortably able to pay it in the event of a claim and don’t mind footing the bill for smaller losses (say, a broken pipe or stolen laptop), $2,500 is a fine deductible to choose. If you don’t have much in the way of savings or live in an area at risk of property damage or theft, you may want to consider a lower deductible.
Do you have to pay a deductible for the liability portion of your policy?
Unlike your property coverages, you don’t pay a deductible on liability claims.