By increasing your deductible, you’re essentially saying that you’ll pay more whenever an insurance claim is filed. An insurance deductible is the amount of money that you’ll pay toward a claim prior to the insurance money starting to pay, thus, the higher your deductible, the less liability the insurance company carries, which in turn will lower your monthly premium.

Just as with car insurance, increasing your deductible from $500 to $1,000 could actually decrease your monthly premium insurance payment by up to 25%. Before adjusting your deductible, you’ll want to consider the pros and cons, as well as talk to your insurance agent to see if its the right move for you. If you live in an area that has common disasters – floods in the east, ice storms in the northeast, tornadoes in the midwest, earthquakes in California, etc. then increasing your deductible might not be the best idea, unless you’re comfortable covering the extra amount. In each of these disaster prone areas, you will most likely have a separate deductible for each type of disaster, so again, check with your insurance agent.