A Simple Guide to Making the Right Decision
One of the most common questions we hear from clients is:
“What deductible should I choose?”
It’s a great question—and one that doesn’t have the same answer for everyone.
📺Prefer to Watch Instead?
Choosing the right deductible is a personal decision. In this short video, Beth DeLaForest explains how your premium, savings, and comfort with risk can help you decide what makes sense for you.
Watch Beth break it down HERE
Many people assume the goal is to choose the lowest deductible possible. Others assume they should choose the highest deductible available to save money on their premium.
The reality is that the best deductible is the one that aligns with your financial situation, comfort level, and ability to handle unexpected expenses.
Let’s break it down.
What Is a Deductible?
A deductible is the amount you agree to pay out of pocket before your insurance coverage begins to contribute to a covered claim.
For example, if your home suffers $15,000 in hail damage and you have a $2,500 deductible, you would be responsible for the first $2,500 and the insurance company would pay the remaining covered amount.
The same concept applies to many types of insurance, including homeowners, auto, and business policies.
Why Does Your Deductible Matter?
Your deductible directly impacts two things:
- How much you pay for insurance.
- How much you pay if you have a claim.
Generally speaking:
- Lower deductible = Higher premium
- Higher deductible = Lower premium
The tradeoff is deciding whether you’d rather pay more each month or take on more financial responsibility if something happens.
The Case for a Lower Deductible
A lower deductible can provide peace of mind because you’ll have less to pay if a claim occurs.
For example, a $500 or $1,000 deductible may make sense for someone who:
- Prefers predictable expenses
- Doesn’t have a large emergency fund
- Wants to minimize out-of-pocket costs after a loss
- Would struggle to absorb a larger unexpected expense
While the premium will typically be higher, some people value the financial cushion a lower deductible provides.
The Case for a Higher Deductible
A higher deductible often lowers your insurance premium and can make sense if you have savings set aside for emergencies.
A higher deductible may be a good fit for someone who:
- Has a healthy emergency fund
- Is comfortable assuming more risk
- Wants to reduce ongoing insurance costs
- Rarely files smaller claims
For many homeowners today, deductibles of $2,500, $5,000, or even percentage-based wind and hail deductibles have become increasingly common.
The Question Most People Should Be Asking
Instead of asking:
“Which deductible is cheapest?”
A better question is:
“How much could I comfortably pay tomorrow if something happened?”
Imagine a hailstorm damages your roof next week.
Could you comfortably write a check for:
- $1,000?
- $2,500?
- $5,000?
- More?
Your answer often points you toward the deductible that makes the most sense for your situation.
Don’t Forget About Emergency Savings
One of the biggest mistakes we see is choosing a deductible based solely on premium savings without considering whether the funds are available if a claim occurs.
Saving $150 per year on premium may not feel quite as valuable if you’re suddenly responsible for an additional $4,000 after a loss.
The goal is balance—not simply finding the lowest premium possible.
What About Wind and Hail Deductibles?
Many insurance carriers now offer separate wind and hail deductibles, especially in areas prone to severe weather.
Unlike a flat deductible, these may be based on a percentage of your home’s insured value.
For example:
A home insured for $500,000 with a 1% wind and hail deductible would have a deductible of $5,000 for a qualifying wind or hail claim.
This is one of the most important parts of a policy to understand because it can significantly impact your out-of-pocket responsibility after a storm.
So What Deductible Should You Choose?
There isn’t a universal answer.
The right deductible depends on:
- Your financial situation
- Your savings
- Your risk tolerance
- Your claims history
- Your comfort level with unexpected expenses
The goal isn’t simply to spend less on insurance.
The goal is to choose a deductible that allows you to confidently handle a claim if one occurs.
Final Thoughts
Insurance isn’t just about the premium. It’s about understanding the financial responsibility you’re taking on when something unexpected happens.
A deductible should never be a surprise.
If you’re unsure whether your current deductible still makes sense, now is a great time for a review. Life changes, finances change, and your insurance strategy should evolve with them.
At Aspire Insurance Group, we’re always happy to walk through your options and help you find the right balance between protection, affordability, and peace of mind.
Have questions about your deductible or coverage? Schedule a protection check-in with our team by calling 📞 (651) 760-8369, (715) 781-8217, (218) 741-0000, or (608) 755-1027, emailing hi@aspireinsurancegroup.com or booking a meeting with our team HERE. We’d be happy to review your policy and help make sure everything still aligns with your goals.