Is it better to choose a low deductible with a higher premium, or a high deductible with a lower premium? It is one of the most frequent — and least understood — decisions when taking out insurance. This calculator solves it: it compares the two options and tells you how many claims per year are needed for the low deductible to be worth it (the break-even), and the expected annual cost of each choice based on how often you expect to make a claim. So you decide with numbers, not by feel.

What an insurance deductible is

The deductible is the part of each claim that stays on you: the insurance pays only the excess. With a €500 deductible, on a €2,000 loss you pay the first 500 and the insurance the remaining 1,500. The deductible exists because it reduces small claims and the risk for the insurer, who in exchange offers you a lower premium. Choosing the deductible means deciding how much risk to keep on yourself and how much to transfer to the company.

Low vs high deductible: the trade-off

The principle is simple: the higher the deductible, the lower the premium, and vice versa. A low deductible costs you more each year in premium, but makes you pay less out of pocket when you have a claim. A high deductible saves you on the premium, but exposes you to a larger expense in case of loss. The point is to understand whether the premium saving of the high deductible compensates the higher outlay on claims — and this depends on how often you think you will make a claim.

Premium and deductible: the relationship

The insurer prices the premium based on the risk it takes on. A low deductible means the company pays more and more often, so it raises the premium. A high deductible reduces what the company pays, and lowers the premium. The premium difference between the two options is the price you pay to transfer to the company the part of risk between the low and the high deductible. The calculator compares exactly this: extra premium against claim savings.

The break-even on claims

The heart of the calculation is the break-even on claims: the number of claims per year at which the two options cost the same. It is obtained by dividing the low deductible's extra premium by the saving the low deductible gives you on each claim. If you make more claims than the break-even, the low deductible wins; if you make fewer, the high one wins. It is the rational way to choose: compare your expected claim frequency with this threshold.

How the calculator works

Enter the premium with low deductible, the premium with high deductible, the two deductibles and the number of expected claims per year. The calculator determines the low deductible's extra premium, the saving per claim, the break-even claims and the expected annual cost of each option. The verdict tells you which wins based on your expected claims: the low deductible, the high one, or whether the two options are equivalent.

The values you need

The two premiums are the annual amounts required for the low-deductible option and the high-deductible one. The two deductibles are the amounts that would stay on you per claim in each option. The expected claims per year is how often you expect to make a claim: 0.5 means one every two years, 2 means two per year. Estimate this number based on your history and risk profile.

The extra premium

The extra premium is how much more you pay each year by choosing the low deductible: its premium minus the high deductible's. It is the "certain" cost of the low deductible, which you pay regardless of claims. If the low deductible costs €1,200 and the high one €900, the extra premium is €300 per year. This is the amount the low deductible must "recover" through the lower outlays on claims to be worth it.

The saving per claim

The saving per claim is how much less you pay out of pocket, on each claim, by choosing the low deductible: the high deductible minus the low one. With a low deductible of €500 and a high one of €1,500, you save €1,000 on each claim. It is the "refund" the low deductible gives you every time you have a loss. The higher this saving, the fewer claims are needed to justify the extra premium: the break-even drops.

The break-even claims

The break-even claims are the decisive threshold: extra premium divided by saving per claim. If the extra premium is €300 and you save €1,000 per claim, the break-even is 0.3 claims per year — that is one claim every just over three years. If you expect more claims than this, the low deductible wins. Always compare this threshold with your expected frequency: it is the objective criterion to choose between the two deductibles.

The expected annual cost

The expected annual cost is the final summary: premium plus expected claims multiplied by the respective deductible. It combines certain cost (premium) and probable cost (deductibles on expected claims) into a single comparable figure. The option with the lower expected cost is the one that, on average, wins for you. The calculator shows it for both deductibles, so you see at a glance which costs you less in the long run, given your expected claims.

Expected cost by number of claims

How the expected cost changes as claims vary (premiums €1,200/900, deductibles €500/1,500):

At the break-even the costs coincide; above it the low deductible wins, below it the high one.

When each one wins

The right choice depends on your profile:

Those who make few claims and can afford to pay them save with the high deductible; those who make many or have little liquidity prefer the low one.

Types of deductible

The deductible can be structured in different ways:

This calculator uses the absolute deductible (fixed amount per claim), the most common.

Beyond the calculation: risk aversion

The expected cost is not everything. A low deductible also offers peace of mind and predictability: you know that, whatever happens, the outlay will be limited. For those who do not have the liquidity to cover a high deductible in case of a claim, the low one can be the right choice even if the expected cost is slightly higher. Risk aversion has a real value: paying a bit more to sleep peacefully is a legitimate decision, not a calculation error. Use the break-even as a compass, not as an absolute rule.

The limits of the calculation

This model is a simplification. It is based on the expected number of claims, which is an uncertain estimate. It does not consider the limits and the co-insurance, the policy exclusions, the fact that the premium can rise after claims, nor the liquidity needed to cover the high deductible at a difficult time. It does not even assess the different quality of the coverages. Use it for the basic economic comparison, then read the policy conditions before choosing.

Common mistakes

• Always choosing the low deductible out of fear, ignoring the premium saving.
• Always choosing the high deductible for the low premium, without assessing the expected claims.
• Underestimating the frequency of your claims.
• Forgetting to have the liquidity to cover the high deductible in case of a loss.
• Comparing only the premiums, ignoring the deductibles and expected claims.

How to use the calculator

Enter the two premiums, the two deductibles and the expected claims per year. Read the extra premium, the saving per claim, the break-even and the expected cost of each option. Compare the break-even claims with your expected frequency: if you expect more claims, choose the low deductible; if fewer, the high one. Try different claim scenarios to see how solid your choice is. It is the quickest way to decide the deductible with the right numbers.

Practical example

You compare two options: low deductible with a €1,200 premium and a €500 deductible, against a high deductible with a €900 premium and a €1,500 deductible, and you expect 0.5 claims per year (one every two years). The result: an extra premium of €300, a saving per claim of €1,000, a break-even of 0.3 claims per year, an expected cost of €1,450 with the low deductible and €1,650 with the high one, with the verdict "the low deductible wins: the expected claims justify it". Expecting 0.5 claims, above the 0.3 break-even, the low deductible costs you less. Enter your numbers for your real situation. The model is based on the expected number of claims and does not consider limits, co-insurance, exclusions, the premium increase after claims or the liquidity needed. It is an informational estimate.

Frequently asked questions

What is an insurance deductible?

It is the part of each claim that stays on you: the insurance pays only the excess. With a €500 deductible, on a €2,000 loss you pay the first 500 and the company the remaining 1,500.

Is a high or low deductible better?

It depends on the expected claims. A low deductible (high premium) wins if you claim often; a high one (low premium) if you claim rarely. The break-even tells you the threshold of claims per year above which the low one wins.

How is the break-even on claims calculated?

You divide the low deductible's extra premium by the saving it gives on each claim (high deductible minus low). With €300 of extra premium and €1,000 of saving per claim, the break-even is 0.3 claims per year.

What does 0.5 claims per year mean?

It means, on average, one claim every two years. It is an expected frequency: you can enter decimal values (0.3, 0.5, 1.5) to reflect how often you expect to make a claim over time.

What is the expected annual cost?

It is the premium plus the expected claims multiplied by the deductible: it combines the certain cost (premium) and the probable one (deductibles). The option with the lower expected cost is the one that, on average, wins.

Why does a low deductible offer peace of mind?

Because it makes the maximum outlay predictable and limited: whatever happens, you pay little out of pocket. For those without liquidity to cover a high deductible, this predictability has value beyond the pure calculation.

Does the calculation consider the premium increase after claims?

No. Many policies raise the premium after claims: this makes claims more costly over time and can shift the advantage toward the high deductible, discouraging small claims. Keep it in mind.

What types of deductible exist?

The absolute deductible (fixed amount on you), co-insurance (a percentage of the loss, often with a minimum) and the disappearing deductible (if the loss exceeds it, the company pays everything). This calculator uses the absolute one.

Should I always choose the lower expected cost?

It is the basic rational criterion, but not the only one. Risk aversion and liquidity matter: if you cannot afford a high deductible at a bad time, the low one may win even with a slightly higher expected cost.

Does it apply to all insurance?

It applies to any policy with a deductible: car, home, health, liability. Wherever you must choose between a low and high deductible with different premiums, the economic comparison is the same.

What does the calculation NOT consider?

It does not consider limits, co-insurance, policy exclusions, the premium increase after claims, the different quality of the coverages and the liquidity needed. It is a basic economic comparison to supplement with the real conditions.

Does it work for any country and currency?

Yes, the calculation is universal and uses the values in your currency. The deductible-premium logic is the same everywhere; the names (deductible, franchise, Selbstbehalt) and the specific company practices change.

Updated July 2026