How Home Insurance Deductibles Work
The deductible is the agreed amount you pay on a covered claim before the insurer covers the remaining eligible amount, subject to the policy.
What is a deductible?
Insurance Bureau of Canada's glossary defines a deductible as an agreed specified amount the insured must pay on a claim before the insurer covers the rest of the eligible claim. The obligation to pay it is not based on fault.
IBC insurance glossary →Why changing the deductible can change the premium
Home insurance pricing reflects the amount and frequency of risk transferred to the insurer. A higher deductible leaves more of each covered loss with the policyholder, so some insurers may offer a lower premium in return. The exact savings are insurer- and policy-specific.
IBC also identifies deductible, replacement cost, property characteristics and claims history among the factors that can influence home insurance pricing.
IBC — How home insurance rates are set →Questions to ask before raising a deductible
Keep the deductible within an amount you could realistically pay after an unexpected covered loss.
Compare the real annual premium difference instead of assuming a larger deductible always produces meaningful savings.
Some policies or endorsements can apply different deductibles to specific causes of loss.
When comparing quotes, keep limits and endorsements consistent so the deductible is not the only apparent difference.
Calculate the premium-vs-deductible break-even
Enter two real policy options and see how many years of annual premium savings equal the extra deductible you would take on. The calculator does not estimate claim probability.
Open Deductible Break-Even Calculator →