A deductible is what you pay before insurance pays. A higher deductible lowers your premium but costs you more per claim.
By the Home & Dime Editorial Team · Last updated 2026
How it works
With a $1,000 deductible on a $5,000 claim, you pay $1,000 and the insurer pays $4,000. If a claim is smaller than your deductible, insurance pays nothing.
The trade-off
- Higher deductible → lower premium, more per claim.
- Lower deductible → higher premium, less per claim.
Frequently asked questions
Do I pay it per claim?
Usually yes — per claim, not per year.
Should I file below my deductible?
No — you’d pay it all anyway.
The bottom line
Match your deductible to your savings — raise it to cut premiums if you have an emergency fund.
Related guides
- What Does Homeowners Insurance Cover?
Sources: Insurance Information Institute (iii.org); Consumer Financial Protection Bureau; FEMA; state Departments of Insurance. General information, not insurance advice.
Part of our Homeowners Insurance guide
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