| Deductible | Est. Annual Premium | Annual Savings | Extra Risk | Break-Even |
|---|---|---|---|---|
| $500(Current) | $1,500 | -- | -- | -- |
| $1,000(Recommended) | $1,320 | $180 | +$500 | 2.8 years |
| $2,500 | $1,170 | $330 | +$2,000 | 6.1 years |
| $5,000 | $1,050 | $450 | +$4,500 | 10 years |
Break-even = how many claim-free years needed to offset the higher out-of-pocket risk. Lower is better.
If you go 5 years without a claim, here's how much each deductible level saves you (savings minus additional risk).
Disclaimer
Premium reduction percentages are estimates based on industry averages. Actual discounts for raising your deductible vary by insurer, province, and policy type. Contact your broker or insurer to get exact figures for your policy.
A licensed broker can run your exact numbers and find the optimal deductible for your situation.
Talk to a BrokerA deductible is the amount you pay out of pocket before your insurance coverage kicks in. For example, with a $1,000 deductible on a $5,000 claim, you pay $1,000 and your insurer pays $4,000. Higher deductibles mean lower premiums, but more out-of-pocket cost when you claim.
Typically, raising your deductible from $500 to $1,000 can save 10-15% on your premium. Going from $500 to $2,500 can save 20-25%. The exact savings depend on your insurer, province, and type of insurance.
The break-even point is how many claim-free years you need for the premium savings to offset the higher deductible risk. If raising your deductible saves $200/year but adds $500 in risk, you break even in 2.5 years. If you typically go more than 2.5 years without a claim, the higher deductible saves you money.
Yes. For auto insurance, you can often set separate deductibles for collision and comprehensive coverage. For home insurance, you may have different deductibles for your main coverage vs. specific endorsements like earthquake or sewer backup.