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What is the best deductible for home insurance?
I’m shopping for home insurance and I have a few companies in mind, but I’m weighing the options for my deductible. I know a higher deductible reduces my annual premium, but I want to make the right decision. What is the best deductible for home insurance?
Sadie Lovemore · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’d love to help you make the right decision for you! Truth is, the best deductible for home insurance is what makes sense for your budget, meaning you could easily afford to pay it or pay for damage below it.
Let’s break this down: If you have a $5,000 deductible, your annual premium might be on the lower side, but you’ll only be able to make a claim for damage above $5,000. That means if your $1,000 bike is stolen, you’ll have to replace it yourself.
If you don’t mind paying out of pocket for smaller losses, choosing a higher deductible might make more sense for you. Keep in mind the average home insurance deductible is $1,000. It might be tempting to set a high deductible to pay a lower premium—just make sure you’ve set aside that amount in your savings.
Another thing you’ll want to consider are the two types of home insurance deductibles:
- Dollar-amount deductible. This is the specific dollar amount you must pay out of pocket. In the examples above, I used dollar-amount deductibles.
- Percentage-based deductible. This deductible is based on a percentage of your home’s insured value. If you have a 2% deductible and $250k of dwelling coverage, for instance, you will pay 2% of your coverage amount, or $5,000.
Before choosing your deductible, you want to make sure you’re getting the best deal on your home insurance annual premiums. If you want cheap home and renters insurance quotes fast, go to
Jerry
. A licensed broker that offers end-to-end support, the Jerry app gathers affordable quotes, helps you switch plans, and helps to cancel your old policy. Even better—Jerry will help you bundle your home and auto policies for maximum savings.View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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