Deductible Break-Even Calculator
Compare a lower-deductible/higher-premium option with a higher-deductible/lower-premium option using the actual numbers you were offered.
Enter two actual policy options. Option A can be your lower-deductible choice and Option B the higher-deductible choice.
At the entered premiums, 3.3 claim-free years of premium savings equal the extra deductible amount. This does not estimate the chance or cost of a claim.
Keep your inputs, result and assumptions together. Replace any example values before saving. Review the report to print it or save a PDF through your browser. The file is created on your device.
What does “break-even” mean here?
If Option B saves C$150 per year but has a deductible C$500 higher than Option A, C$500 ÷ C$150 = about 3.3 years. That means 3.3 years of the entered annual premium savings equals the extra deductible amount.
Why deductibles affect premiums
When a deductible increases, the policyholder retains more of the first part of an eligible loss. Insurers can therefore price different deductible options differently. The useful comparison is the actual premium difference offered for the actual deductible difference.
Where can deductibles apply?
Depending on the policy and province, different coverages can have their own deductibles. Ontario FSRA notes separate deductibles may apply to collision, comprehensive, all perils, specified perils and DCPD. Home and tenant policies can also have deductible structures defined in their wording.