Your insurance deductible is the portion of every covered claim you pay before the insurer contributes. Choosing a higher deductible reduces your annual premium but increases your out-of-pocket exposure on any claim. The break-even analysis -- how many years of premium savings does it take to offset one additional deductible dollar -- is exactly what this calculator produces.
Enter your current annual premium, your current deductible, and the alternative deductible you are considering. The calculator shows the estimated annual premium at the higher deductible, your annual savings, and how many claims-free years are required to offset a single claim at the higher deductible level. It also models net savings over five and ten year horizons at different claim frequencies.
The break-even is straightforward: divide the additional deductible amount by the annual premium savings. If raising your deductible from $500 to $1,000 saves $150 per year, you need 3.3 claims-free years to offset one claim event. If you go five years between claims, you come out $250 ahead. If you file a claim in year two, you are $200 behind. The analysis does not predict which scenario will happen -- it gives you the comparison so you can make an informed judgment based on your risk tolerance and expected claim frequency.
Only if you have the cash to cover it without financial hardship. The premium savings are guaranteed; the deductible is only paid if you file a claim. The right deductible is the highest one you could pay comfortably from liquid savings.