Should I choose a higher deductible to lower my premium? This deductible vs premium calculator compares annual premium savings against extra out-of-pocket risk per claim, break-even timing, and whether your emergency savings can handle a higher deductible.
How to use this calculator
- Enter low and high deductible amounts and their monthly premiums.
- Estimate expected claims per year and years to compare.
- Enter emergency savings available for out-of-pocket costs.
- Review break-even years and multi-year savings under your assumptions.
Formula
Annual premium savings = (Low premium − High premium) × 12. Extra deductible risk = High deductible − Low deductible. Break-even years without claim = Extra risk ÷ Annual savings. Multi-year savings = Annual savings × Years − Expected claims × Extra risk.
Example
Moving from a $500 to $1,500 deductible that saves $55/month ($660/year) means you need about 1.5 claim-free years to break even on one extra $1,000 out-of-pocket event.
Frequently asked questions
- Does this work for auto and home insurance?
- Yes — enter quotes for the same coverage level with different deductibles. Policy details and exclusions may still differ.
- What if I never file a claim?
- If claims stay below the break-even rate, the higher deductible usually saves money — but one large claim can offset years of savings.