Low Premium, High Deductible: When Is Cheap Actually Expensive?

Short answer: the break-even point of premium and deductible

The decision between a low premium and a high deductible boils down to one central question: can you afford to pay a significant damage out of pocket without ending up in financial trouble? An insurance policy with a premium of €20 per month and a €500 deductible seems cheaper than a policy at €25 per month with a €150 deductible. But if you claim a damage of €400, you'll still be worse off with the cheaper policy, because you pay the entire amount yourself while the higher premium offers a lower deductible. However, if you go claim-free for several years, the premium differences accumulate. At a saving of €5 per month, it takes more than 5 years to recoup an extra €350 deductible. This balance is the essence of every decision: it is purely a probability calculation based on your claim history and your savings buffer. There is no universal right or wrong, but there is a threshold where cheap becomes truly expensive: if an unexpected claim completely drains your buffer and you can't pay other bills, the 'saving' has been a costly mistake.

• For Dutch car insurance (WA+ and Allrisk), a voluntary deductible can go up to €500 or €1,000, yielding a premium discount of 10% to 25% per year.
• Contents and buildings insurance often have a standard deductible of €100 to €250, which you can increase to e.g. €500 for a lower premium.
• Travel insurance with a higher deductible (e.g., €150 instead of €50) reduces the premium, but can be disappointing for small baggage claims.
• The mandatory health insurance deductible (€385 in 2025) is outside the scope of damage insurance, but the trade-off principle is similar.

Which insurances and life events this concerns

The deductible in damage insurance is primarily relevant for the most common policies in Dutch households: car insurance (WA+ and Allrisk), contents insurance, buildings insurance, and to a lesser extent travel insurance. Personal liability insurance (AVP) typically has no deductible, which is one reason it's so widely held. Damage caused by pets may fall under your AVP; read more about pet damage liability insurance. For car insurance, the mandatory third-party liability part is deductible-free, but for the comprehensive covers (WA+ and Allrisk) you can often choose a voluntary deductible. This moment arises when you take out a new policy, but you can also review your choice at each annual renewal. Life events such as buying a different car, moving house, renovating, or expanding your family are ideal moments to reassess your deductible.

If you've just bought a larger house and your contents value rises, a high deductible for theft could be uncomfortable. Similarly, when your financial buffer changes – for instance due to a new job, redundancy, or a major expense – it's wise to consider the balance between premium and deductible. With travel insurance, the deductible is often overlooked. Many continuous travel policies have a standard deductible of €50 to €75, but you can voluntarily increase it to say €150 to lower the premium. For a family that goes on holiday once a year with a small chance of baggage damage, this can pay off. But if you travel frequently and are prone to delays, theft or medical expenses abroad, a low deductible can bring peace of mind. In practice, many people decide their deductible based on the lowest monthly premium, without computing the total costs over multiple years.

What is usually relevant: voluntary deductible and coverage

A voluntary deductible is an amount you pay yourself per claim, on top of any mandatory deductible. This system is designed to keep premiums affordable and to discourage small claims, whose handling costs are often disproportionate. For most damage insurances, the deductible applies per claim event. That means if you have two separate damages in one year, you pay the deductible twice. With a high deductible, that can sting. On the flip side, if you make no claims for five years, a higher deductible means you've structurally paid less premium and that amount is fully saved. So it's relevant to look at how often you've historically filed claims and whether you expect that to change. For example, if you live in a neighbourhood with high burglary risk, a low deductible on your contents insurance may be wiser than if you live in a secure area with good locks.

For car insurance, the deductible is often linked to the driver's age and car type. Young drivers already pay a higher premium; a high deductible can lower monthly costs, but if you're a novice driver and have more frequent small damages, you risk paying them all yourself. Additionally, Allrisk policies often allow you to separately set the deductible for window glass damage, so you don't pay the full deductible for a small chip in your windscreen.

• Car insurance WA+ and Allrisk: deductible often €0 (standard), €100, €250, €500, or €1,000. Premium difference between €0 and €500 can be €15-25 per month.
• Contents insurance: standard €100 or €150, sometimes already €250. Raising to €500 can lower premium by 15-20%.
• Buildings insurance: similar to contents; note that storm damage to a roof often exceeds the deductible, making a higher deductible relatively safe.
• Travel insurance: deductible ranges from €0 to €250; a higher deductible significantly cuts premiums, but small claims (baggage delay) are then no longer worthwhile.

What is often misunderstood about deductibles

A stubborn misconception is that a low deductible means your insurer fully covers every damage. That's not true: the deductible is deducted from the payout. If the damage is lower than the deductible, you bear all costs yourself. Sometimes that's even smarter: filing a small claim can lead to premium increases or loss of no-claim years (schadevrije jaren) with car insurance. Also read our guide on increasing deductibles to save for a calculation example. Additionally, many people think that a high deductible always means you're less well insured. That's not the case: the coverage (maximum payout and conditions) remains the same; only the portion you pay yourself increases. So you're not suddenly underinsured on essential points, as long as the insured sum and terms match your actual risk.

An important nuance: in some policies, the deductible doesn't apply to all causes of damage. For example, with buildings insurance, storm damage may fall under a separate clause with a different deductible, or it may be waived above a certain wind speed (often wind force 7). With car insurance, glass damage can often be repaired without deductible if you have supplementary glass cover. You'll find these details in the policy terms. A further misunderstanding: the deductible applies per event, not per year. If your car is damaged twice in the same year by different incidents, you pay the full deductible twice. This can be a surprise if you're used to the annual deductible of health insurance. For more on how claims affect your premium, check the claim-free years premium impact checklist.

*Note: exact terms and exceptions vary per insurer. Check your own policy schedule. This table gives a general overview.

What to check in your own policy

To assess whether your current deductible suits your situation, start with the policy schedule and terms of each policy you hold. Look at the current deductible and note whether there's a voluntary increased deductible. If you took out a policy years ago, it's quite possible you chose a higher deductible back then while your financial buffer has since shrunk, or vice versa. Also, check how many claims you've filed in recent years and whether you expect your chance of damage to change. For example: a new car with a high market value makes a low deductible attractive, whereas an older car might justify a higher deductible's premium saving, provided you can afford the repair costs.

Common mistakes when choosing a deductible

A classic mistake is fixating on the lowest premium. Consumers who compare purely on price often end up with a policy that has a hidden high deductible or exclusions, leading to disappointment when claiming. It's essential to look not just at the premium, but at the total costs over a longer period. Another mistake is underestimating the impact of multiple claims in a year. Especially with car insurance, a second claim within a year can cause a significant step back on the bonus-malus ladder (no-claims discount), raising the premium for years. The deductible is then just the tip of the financial iceberg.

Many people also assume that the premium decreases proportionally with the increase in deductible. In reality, the saving is degressive: the biggest premium cut comes from the first step from zero to a modest deductible. Beyond a certain point, a further increase hardly yields any extra discount, while your risk continues to rise. Furthermore, it's often forgotten that voluntary deductibles for contents and buildings insurance sometimes differ per cause. Always read the fine print. With travel insurance, an ill-considered increase in deductible leads to frustration: a stolen €200 phone then yields nothing, while you're still paying the premium.

• Choosing only the lowest premium without checking the deductible and coverage.
• Assuming the premium saving rises proportionally with the deductible increase.
• Ignoring the possibility of multiple claims per year.
• Forgetting that the deductible applies per event, not per year.
• Overestimating or underestimating your buffer when hit by a sudden high expense.
• Not knowing that some damage causes are excluded from the deductible.

When having an advisor review is logical

If you're unsure about the right balance between premium and deductible, or if you want to review several policies, an independent perspective can add a lot of value. An advisor who doesn't earn commissions from insurers can objectively assess whether your current setup matches your risk profile and financial capacity. The beauty of such a check is that you don't have to switch if it's not necessary; you simply gain insight. With a commission-free insurance advice, your entire portfolio is often reviewed, which helps you discover not only deductible issues but also overlapping covers or unnecessary modules. Especially for households with multiple cars, a home, and changed circumstances, this is an efficient way to stay on top of costs.

The how the free damage insurance check works page shows how you can have your situation looked at without obligation. An advisor can then create calculation examples with different deductible scenarios for your specific policies and offer a fair comparison. Ultimately, the choice is yours, but professional insight can help you avoid a wrong turn. That one claim where you have to pay the deductible yourself can, at too high a threshold, cost more than you saved in premiums over years.