On the tonysteuer.com website, you will find the Optimal Deductible Calculator which is designed to help you select the insurance deductible that provides the most value for you. The Optimal Deductible Calculator can be used for any insurance policy that has a deductible including auto insurance, health insurance and homeowner’s insurance.
The general rule is the higher the premium the lower the deductible. A higher deductible means that there is less risk to the insurance company and more risk to the insurance consumer. The reduction of risk to an insurance company typically results in a lower premium.
There is no set-in-stone formula for calculating your deductible; sometimes insurance companies will price in an “incentive” for a certain deductible, so determining your break-even point is always a good idea. Ask yourself whether the money you save in insurance premiums justifies taking on a higher risk, along with a higher deductible (and with health insurance, higher copays and coinsurance).
The Optimal Deductible Calculator will calculate the additional risk that you are taking on and divide it by the annual savings to determine your break-even point (number of years to break-even). Please note that the estimated number of medical visits and co-payment are only applicable to health insurance. The Optimal Insurance Deductible is here.