Guide
Turn your deductible into a dollar amount
A deductible is the part of a covered loss assigned to you under the policy. Some are fixed dollar amounts; others are percentages of a stated insured value. Convert a percentage to dollars before comparing premiums. A policy can have different deductibles for different causes of loss.
Find every deductible
A policy can have different deductibles for different causes of loss. Texas’s deductible guide explains fixed-dollar and percentage forms. Do not stop after finding the first deductible on the declarations page; check endorsements for wind, hail or other named events.
Write the triggering event, amount and calculation base in three columns. If you cannot tell what the percentage applies to, ask the insurer before using the number in a comparison. It may apply to the insured dwelling value rather than the amount of damage.
A hypothetical calculation
Suppose a deductible is 2% of an insured dwelling value of $300,000. The arithmetic is $300,000 × 0.02 = $6,000. It is not 2% of the repair bill. These are invented figures to explain the calculation, not a quote or a statement about a particular policy.
Now compare a hypothetical $1,000 fixed deductible with that $6,000 amount. The useful question is how you would fund the difference if a covered event occurred. There is no universal answer: use your own accessible savings and other commitments, not a premium saving alone.
Compare like with like
The NAIC shopping guide notes that higher deductibles can reduce premiums and coastal policies may have separate windstorm arrangements. Ask for quotes with the same coverage limits and settlement basis before attributing a price difference to the deductible.
Put the annual premium saving beside the additional out-of-pocket exposure. Do not assume that saving will accumulate before a loss. Also ask whether the deductible applies per event, per year or on another basis; insurance products do not all work the same way.
Keep the written answer
Save the insurer’s calculation with the policy, including the value used and the endorsement name. At renewal, repeat the arithmetic if the insured value changes. A percentage that stays the same can still mean more dollars. Your calculation helps you understand the contract; it does not decide whether a loss is covered.
Sources & review
Sources checked October 7, 2026. Prepared by Sherpa Desk from public consumer guidance; no specialist review is claimed. State-specific rules are identified in the article.
- What to know about deductibles
Texas Department of Insurance - Tips for shopping for homeowners insurance
NAIC