A higher deductible lowers the premium — but how many claim-free years pay back the gap? Premium savings vs the extra deductible shows the break-even and whether the trade is worth it.
The example
$1,000 more deductible, $250/yr saved.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | 1000 / 250 | — |
| 3 | Break-even | → 4 years |
The formula
The formula:
How it works
How it works:
- Extra deductible = high deductible − low deductible (added risk you carry).
- Annual saving = low-deductible premium − high-deductible premium.
- Divide for the claim-free years needed to recoup the higher deductible.
- Fewer break-even years → the higher deductible is the better bet if claims are rare.
Illustrative math only — not insurance, financial, or legal advice. Policy language, state regulation, and carrier rules govern actual claims, premiums, and coverage. Always read the policy and consult a licensed professional.
Try it: interactive demo
Extra deductible and annual premium saving.
Variations
5-year net (no claim)
If claim-free:
Net if one claim
Pay the deductible once:
Worth it?
Decision flag:
Pitfalls & errors
Extra deductible only. Use the difference, not the whole deductible.
Annual saving. Compare premiums on the same coverage.
Claim odds. The trade depends on how often you claim — not just the math.
Practice workbook
Frequently asked questions
How do I compare deductibles in Excel?
When is a higher deductible worth it?
What's the net if I do have a claim?
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