What deductible should you choose for home insurance?
Do the break-even math
Ask your agent for the premium at two deductible levels. If moving from $1,000 to $2,500 saves $150 a year, you take on $1,500 of extra risk to save $150, so it takes ten claim-free years to come out ahead. If it saves $400 a year, the math looks better. Most homeowners file a claim only every several years, which is why moderate to higher deductibles often make sense if you have savings.
The wind and hail deductible matters most for roofs
Many Georgia policies apply a separate percentage deductible to wind and hail. At 2 percent on a $400,000 dwelling limit, that is $8,000 per storm. Ask whether a flat dollar wind and hail deductible is available and what it costs. Since hail and wind cause most roof claims, this number is the one you will actually feel. See percentage wind and hail deductibles.
Other factors
- Your savings: never choose a deductible you could not pay in an emergency.
- Your lender: many mortgage lenders cap how high your deductible can be.
- Your roof: an older roof makes a claim more likely, so a very high deductible is riskier.
- Claims history: a higher deductible also keeps you from filing small claims that can affect renewal. See whether claims raise premiums.
Is home insurance tax deductible?
If that is what you meant: premiums on the home you live in are not deductible, though premiums on rental property generally are.