Raising Your Insurance Deductible Can Cut Premiums by 10–14%

Full analysis

A NerdWallet analysis of more than a billion insurance rates found that raising your auto insurance deductible — the amount you pay out of pocket before insurance kicks in — from $1,000 to $2,000 cuts premiums by about 13.5% on average. For homeowners insurance, moving from a $1,000 to a $2,500 deductible saves about 10.6% on average. The actual dollar savings depend heavily on how high your current premiums are: a high-risk driver paying $587 a month could save roughly $81 a month, while a low-risk driver paying $82 a month might save only $17.

The catch is that you become responsible for the larger out-of-pocket amount if you file a claim. About 4% of people with collision or comprehensive auto coverage filed a claim in 2024, so the risk is real. One practical approach: set aside the monthly savings in a dedicated fund until it equals the deductible increase — a break-even period that can range from about 13 months for a high-premium driver to nearly five years for a low-premium one. The same trade-off applies to home and condo insurance. Renters insurance savings are minimal — roughly $3.45 a month — making the switch hard to justify there.