How does a deductible affect your premium?

Why the trade-off exists

Small claims are costly for insurers to handle. When you take a higher deductible, you remove many small claims and part of every large one, so the insurer charges less.

The wind and hail piece

In Georgia, the wind and hail deductible is often the one that matters most for the roof. Choosing a percentage deductible, such as 2 percent of the dwelling limit, can lower the premium noticeably, but on a $350,000 dwelling limit that is $7,000 out of pocket on every hail or wind claim. Many homeowners pick it without realizing the dollar amount.

How to choose

1. Ask for side by side quotes at several deductible levels, for both the all other perils and the wind and hail deductibles.
2. Divide the extra deductible by the yearly savings. If moving from $1,000 to $2,500 saves $150 a year, it takes 10 years without a claim to break even.
3. Consider your roof. In an area with frequent hail, or with a roof that may need replacing in a few years, a lower wind and hail deductible may be worth paying for.
4. Match it to your savings. Choose a deductible you could pay from an emergency fund within a few weeks.

Other premium factors

Roof age and material, claims history, credit-based insurance scores where used, location and coverage limits all affect the premium. A new roof, or impact-resistant shingles where insurers offer a credit, can lower it.

See percentage deductibles, roof age and insurance and whether claims raise premiums.