Auto and home insurance policies include a deductible, which is a small portion of the claim that the policyholder pays first. For example, if your home policy has a $500 deductible, you would only be responsible for the first $500 of the claims cost. If the total damage costs less than $500, you would pay for it yourself.Raising your deductibleDeductibles ensure that insurance pays for the major damages and losses instead of the minor ones. They also help to keep premiums low; raising your deductible is one way to lower your insurance premium. Because your deductible represents the extent to which you’re willing to insure yourself, a higher deductible results in a lower premium.Remember, insurance is designed to cover the big losses. So, if you’ve had a significant loss, like a house fire that destroyed your kitchen, paying a deductible of $1,000 will seem small compared to the $50,000 paid by the insurance company. In the long term, the amount you save on premiums should compensate for the higher deductible when you have a claim.