The Smart Way to Raise Your Deductibles and Save
Raising your deductible is one of the fastest ways to lower your premium — but done carelessly, it can leave you exposed when you file a claim. Here's how to do it the right way.
How much can you actually save?
Moving your auto collision/comprehensive deductible from $500 to $1,000 typically cuts that portion of your premium by 15-20%. On a homeowners policy, raising your deductible from $1,000 to $2,500 can save 10-15% or more, depending on your carrier and location.
Rule #1: only raise what you can actually afford to pay
A higher deductible only makes sense if you have that amount sitting in savings, ready to cover it. If a $1,000 deductible would create real financial strain after an accident or house fire, the premium savings isn't worth the risk — keep it lower.
Match your deductible to your risk tolerance
If you rarely file claims and have a solid emergency fund, a higher deductible is usually a smart trade. If you're accident-prone, live somewhere with frequent weather claims, or don't have savings to cover the gap, a lower deductible provides more predictable protection.
Consider different deductibles for different coverages
You don't have to raise every deductible equally. Many homeowners keep a lower deductible for wind/hail (common, moderate-cost claims) while raising it for the base "all other perils" deductible, which covers larger, less frequent losses.
Redirect the savings, don't just spend it
The smartest approach: take whatever you save monthly from a higher deductible and put it directly into a dedicated "deductible fund." Within a year or two, you'll have the full deductible amount saved — meaning the higher deductible costs you nothing extra in real risk.
The bottom line
A higher deductible is a legitimate, effective way to lower your premium — as long as you genuinely have the funds to cover it if you ever need to file a claim. Done wisely, it's free money. Done carelessly, it's a gamble.