An insurance deductible is what you must pay out-of-pocket should you need to make a claim. As an example, maybe your insurance company is offering $5,000 and you have a deductible of $1,000: in this case, you’ll have to put $1,000 and the insurance company will put in $4,000. Your premium, on the other hand, is what you pay monthly, quarterly, or annually as a sort of “subscription fee” to remain covered.
There’s a direct relationship between the cost of your premium and your insurance deductible – the higher your deductible is, the lower your premium will be. In order to lower the cost of your premium, then, you can opt to increase your deductible.
Of course, increasing your deductible means you’ll have to pay more out of pocket should you need to make a claim. Since homeowners insurance claims aren’t actually filed that often, though, you’ll likely save a lot more money over the long run by increasing your deductible and lowering your premium – with the money you’ve saved, the costs of the deductible will probably be covered!
The same applies to renters insurance. However, keep in mind that, since renter’s insurance is cheaper than homeowners insurance, raising your deductible may not lower premiums much and therefore not be worth it.
The amount that you save will vary by company. However, you can contact your company or another company to find out how much you may save. Some insurance companies will even provide online calculators to help you get exact information.