March 12, 2026

What auto and home insurance deductibles should I have and why?

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Auto Insurance Deductibles

The two deductibles that matter most: comprehensive (hail, theft, vandalism, animals) and collision (you hit something).

How to choose the right auto deductible

Ask yourself two questions:

1) How much could you comfortably pay out‑of‑pocket tomorrow?

This is your “emergency repair comfort zone.”

If an unexpected $1,000 expense would be fine → choose a $1,000 deductible.
If that would sting → choose $500.

2) How much is the premium savings worth?

A good rule of thumb:

Raising a deductible from $500 → $1,000 usually saves 10–20% on comprehensive/collision portions of the premium.
Raising to $2,000 can save even more, but only makes sense if you have strong cash reserves.

Recommended for most drivers

Given typical costs and financial planning norms:

Collision deductible: $1,000
Comprehensive deductible: $500 or $1,000
Comprehensive claims (like cracked windshields) happen more often and are cheaper, so many people keep that one slightly lower.

Home Insurance Deductibles

Home insurance deductibles are either flat (e.g., $1,000) or percentage-based (1–2% of dwelling coverage), especially for wind/hail in some states.

How to choose the right home deductible

Ask yourself:

1) Could you comfortably pay $2,500–$5,000 if you had storm or water damage?

Home claims tend to be larger and less frequent than auto.

2) Would raising the deductible significantly reduce your premium?

Often:

$1,000 → $2,500 deductible saves 10–20%
$2,500 → $5,000 saves even more

Recommended for most homeowners

$1,500–$2,500 deductible is ideal for many households.
If you have a healthy emergency fund (e.g., 3–6 months expenses), you can go $5,000.

If you are not a state with extreme hurricane/tornado deductibles like the coasts, percentage-based deductibles usually aren’t required.

And if you have a lot of outdoor gear (like snowboards, flyfishing gear, etc.), consider listing high-value items separately (“scheduled personal property”) — deductibles often don’t apply there.

A Simple Framework to Choose Your Deductibles

Use these four rules and you’ll almost always land in a smart place:

1)Pick a deductible you can pay without stress

This is the safety factor.

**2) Pick the highest deductible you can comfortably afford**

This maximizes savings over time.

3) Consider your likelihood of claims

Drive a lot? Lower collision deductible.
Park outside in hail areas? Lower comprehensive.
Older home? Keep homeowners deductible reasonable.

4) Think of your insurance as protection from financial catastrophe, not minor dings

Pay out of pocket for small fixes; ensure big disasters can’t wipe you out.