Drop full coverage calculator
Should you drop collision and comprehensive on an older car? Compare the most you could collect with what you pay each year, in plain language.
Insurance deductible calculator: is a higher deductible worth it?
A higher deductible lowers your premium but means paying more when you claim. Enter two quotes to see how many claim-free years it takes to come out ahead.
Result
Showing the worked example. Change any number to see your own result.
3.3 yearsBreak-even (claim-free years needed)
The higher deductible saves $150 a year and costs $500 more per claim, so it pays for itself after 3.3 years without a claim. If you claim about once every 5 years, it costs about $50 a year less. Make sure you could pay it from savings.
- Premium saved each year with the higher deductible
- $150
- Break-even (claim-free years needed)
- 3.3 years
- Saved by year 10 with the higher deductible
- $500
- Expected yearly cost, higher deductible
- $1,450
- Total cost, lower deductible
- Total cost, higher deductible
View chart data as a table
| Year | Total cost, lower deductible | Total cost, higher deductible |
|---|---|---|
| 1 | $1,400 | $1,250 |
| 2 | $2,800 | $2,500 |
| 3 | $4,200 | $3,750 |
| 4 | $5,600 | $5,000 |
| 5 | $7,500 | $7,250 |
| 6 | $8,900 | $8,500 |
| 7 | $10,300 | $9,750 |
| 8 | $11,700 | $11,000 |
| 9 | $13,100 | $12,250 |
| 10 | $15,000 | $14,500 |
| 11 | $16,400 | $15,750 |
| 12 | $17,800 | $17,000 |
| 13 | $19,200 | $18,250 |
| 14 | $20,600 | $19,500 |
| 15 | $22,500 | $21,750 |
Cumulative cost year by year
| Year | Claim | Total cost, lower deductible | Total cost, higher deductible | Higher deductible saves |
|---|---|---|---|---|
| 1 | $1,400 | $1,250 | $150 | |
| 2 | $2,800 | $2,500 | $300 | |
| 3 | $4,200 | $3,750 | $450 | |
| 4 | $5,600 | $5,000 | $600 | |
| 5 | ✓ | $7,500 | $7,250 | $250 |
| 6 | $8,900 | $8,500 | $400 | |
| 7 | $10,300 | $9,750 | $550 | |
| 8 | $11,700 | $11,000 | $700 | |
| 9 | $13,100 | $12,250 | $850 | |
| 10 | ✓ | $15,000 | $14,500 | $500 |
| 11 | $16,400 | $15,750 | $650 | |
| 12 | $17,800 | $17,000 | $800 | |
| 13 | $19,200 | $18,250 | $950 | |
| 14 | $20,600 | $19,500 | $1,100 | |
| 15 | ✓ | $22,500 | $21,750 | $750 |
How the result is built
| Premium saved each year with the higher deductible | $150 |
|---|---|
| Extra you pay per claim | $500 |
| Break-even (claim-free years needed) | 3.3 years |
| Expected yearly cost, lower deductible | $1,500 |
| Expected yearly cost, higher deductible | $1,450 |
Compare scenarios
Save up to 3 versions of your inputs and compare them side by side.
How to use this calculator
- Get two quotes. Ask your insurer for the same policy at two deductibles, for example $500 and $1,000.
- Enter both premiums and deductibles. Use yearly premiums.
- Estimate how often you claim. Enter roughly how many years pass between claims for you.
- Read the break-even and expected cost. Choose the higher deductible only if you could pay it comfortably from savings.
What a deductible decision really is
Your deductible is the part of a claim you pay yourself. The Texas Department of Insurance gives a simple example: with a $1,500 collision claim and a $500 deductible, the insurer pays $1,000. Choosing a higher deductible lowers your premium every year, but raises what you pay in the years you claim. Whether that trade is worth it depends on two numbers: how much you save each year, and how often you claim.
This calculator compares two quotes and shows the break-even point and the expected yearly cost of each.
How the calculation works
Yearly saving = premium with lower deductible − premium with higher deductible
Extra per claim = higher deductible − lower deductible
Break-even years = extra per claim ÷ yearly saving
Expected yearly cost = premium + deductible ÷ years between claims
If you go longer than the break-even period without a claim, the higher deductible comes out ahead.
Worked example
The calculator opens with this example: $1,400 a year with a $500 deductible, or $1,250 a year with a $1,000 deductible, and a claim about once every 5 years.
| Line | Calculation | Result |
|---|---|---|
| Yearly saving | $1,400 − $1,250 | $150 |
| Extra per claim | $1,000 − $500 | $500 |
| Break-even | $500 ÷ $150 | 3.3 years |
| Expected cost, $500 deductible | $1,400 + $500 ÷ 5 | $1,500 |
| Expected cost, $1,000 deductible | $1,250 + $1,000 ÷ 5 | $1,450 |
Claiming about once every five years, the higher deductible costs about $50 a year less. If this driver claimed every two years, the lower deductible would win.
The savings test comes first
Even when the numbers favor a higher deductible, only choose it if you could pay it tomorrow from savings. A deductible you cannot afford can leave you unable to repair a car you need for work.
| Your situation | Deductible to lean toward |
|---|---|
| Little or no emergency savings | Lower |
| Solid emergency fund, rarely claim | Higher |
| Older car worth little | Consider whether to keep collision at all |
What changes the answer
- Size of the premium gap. Some insurers price higher deductibles generously, others barely discount them.
- Your claim history. Frequent small claims favor a lower deductible, though frequent claims can also raise premiums.
- Separate deductibles. Collision, comprehensive and home claims can each have their own deductible.
- Percentage deductibles. Wind and hurricane deductibles on homes are often a percentage of the dwelling limit; convert them with the hurricane deductible calculator.
Common mistakes
| Mistake | Better approach |
|---|---|
| Choosing the lowest premium only | Check you could pay the deductible |
| Ignoring how often you claim | It decides which option is cheaper over time |
| Raising the deductible on an old car instead of reviewing collision | Run the drop full coverage calculator |
Next steps
If your car is older, the drop full coverage calculator shows whether collision is still worth paying for. Our guide to collision, comprehensive and deductibles explains the trade-offs in detail.
Questions people ask
Is a $1,000 deductible better than $500?
It is better if the premium saving pays back the extra $500 before you are likely to claim, and if you could pay $1,000 from savings without hardship. This calculator shows the break-even point.
How do I calculate the deductible break-even point?
Divide the extra amount you would pay per claim by the yearly premium saving. If you save $150 a year and the deductible is $500 higher, you break even after about 3.3 claim-free years.
What is a deductible?
The amount of a claim you pay before the insurer pays. With a $500 deductible on a $1,500 collision claim, the insurer pays $1,000.
Do I pay a deductible if someone else hits me?
Not if you claim against the other driver's liability insurance. You do pay it if you claim on your own collision coverage, though your insurer may try to recover it.
Does liability coverage have a deductible?
Generally no. Deductibles apply to coverage for your own car or property, such as collision, comprehensive and home property claims.
Can I have different deductibles for collision and comprehensive?
Yes, many insurers let you choose them separately. You can run this calculator for each one.
Does this work for home insurance too?
Yes. Enter the two home premiums and deductibles. For percentage deductibles, convert them to dollars first with the hurricane deductible calculator.
Sources
- Auto insurance guide — Texas Department of Insurance, accessed
- Home insurance guide — Texas Department of Insurance, accessed
Educational information, not insurance, legal or financial advice. Coverlee does not sell insurance. How we calculate
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