Flat versus percentage deductibles
Most policies use a flat dollar deductible — typically $500, $1,000, $2,500, or $5,000. Some perils, especially wind, hurricane, hail, or earthquake, are subject to a separate percentage deductible based on your dwelling coverage, often 1 to 5 percent.
A 2 percent hurricane deductible on a home insured for $400,000 is $8,000 — a number many homeowners are shocked to discover only after filing a claim.
How raising your deductible affects premium
Moving from a $500 to a $1,000 deductible commonly saves 10 to 15 percent on premium. Going to $2,500 can save 20 to 25 percent. Beyond that, savings flatten out. The right deductible is the highest amount you could comfortably pay tomorrow without disrupting your finances.
When not to file a claim
Filing small claims close to your deductible can raise future premiums and even threaten renewal. Many homeowners reserve their policy for major losses and pay smaller repairs out of pocket. Knowing your deductible and your insurer's claims tolerance helps you make that call wisely.
Key takeaways
- Check whether your policy carries a separate wind or hurricane deductible.
- A higher deductible cuts premium meaningfully up to about $2,500.
- Choose a deductible you can pay without borrowing.
- Avoid frequent small claims — they can affect future renewals.
This article is for general educational purposes and is not legal, financial, or insurance advice. Consult a licensed professional for decisions specific to your situation.