Lenders care a lot about your coverage limit and very little about your deductible. On coverage, the lender wants assurance the home could be fully rebuilt if it were destroyed. You don't have to insure to your exact mortgage balance, but you do need enough coverage, ideally guaranteed replacement cost, to meet the insurer's estimated rebuild cost, which reflects location, square footage, and construction details like roof and foundation type. The pushback comes when your loan balance exceeds that coverage estimate. Deductibles are mostly your call. You can generally set them as high as your insurer is comfortable with, lenders typically accept it, and raising the deductible is a legitimate lever for lowering your premium. Just weigh it against your cash reserves, because a high deductible is a bet that you can cover a loss out of pocket. We've personally carried a $10,000 deductible for 20 years with no claims, which paid off. We've also had a property where water damage ran about $19,000 against that same $10,000 deductible, and most of the repair came out of pocket. So tune the deductible and premium with your insurance agent, keep the coverage limit high enough to satisfy the rebuild requirement, and size the deductible to what you could actually absorb.