Is it better to have a higher deductible for home insurance?

Yes, you could have your insurance company cover the $500 after your deductible, but the cost of your premium will be higher than necessary. The insurance company knows that statistically you are more likely to file a claim with a lower deductible, and since everytime one files a claim they have to investigate it whether there is actual damage or not, it costs them money. So with a higher deductible in the range of $2500 – 7500, most insurance companies will give you a pretty substantial discount, because they know you won’t file a claim unless it is absolutely necessary to put your life back together.

If you take a long term thought process and obtain a higher deductible, over a 10 year period of time, you pay less in insurance even if you did have a claim because the discounted rate for a higher deductible typically pays for itself in 5-7 years.