Claims that boost your insurance rates

A single attack is likely to result in higher premiums. However, homeowners may be able to keep their rates from escalating by remedying the situation to the insurance company's satisfaction.

This may involve getting rid of the dog or taking the dog to an animal trainer. Sometimes, the homeowners' rates would then depend upon passing a probationary period, such as going six months without another attack. (See "Your dog's bite could bankrupt you.")

Water damage

Water damage tends to set off a barrage of red flags for insurers, largely because of the costs of eliminating mold. The biggest controversy over CLUE reports has been over water damage and its effect on real-estate sales.

Homebuyers cannot obtain CLUE reports on homes they are considering purchasing. However, a homebuyer's insurance company can obtain the report in deciding whether to insure a home.

If the insurance company finds a history of mold or water damage, the new buyer may have problems getting home insurance, MSN Money columnist Liz Pulliam Weston says.

"Be careful with a water claim," she says. "Insurance companies aren't as paranoid as they used to be a few years ago, but many have begun to exclude mold coverage from their policies."

Plumbing problems that cause damage inside a property also can be red flags to insurance companies, particularly if the repairs -- or lack thereof -- result in an additional, similar claim.

You might be better off solving water-damage issues yourself, especially if the damage is minor and involves broken pipes or leaks in window wells, walls or seams.

Some home sellers may actually use CLUE reports to their advantage, McCaul says.

"Home sellers can use their CLUE report as a marketing tool to demonstrate to potential buyers that their home has not had a loss claim or, if it has, to show that repairs were done properly," she says. "Homebuyers can make the purchase contingent upon the seller providing a copy of the CLUE report."

Slip-and-fall claims

A slip-and-fall injury is a generic term used to describe an injury that happens when someone trips, slips or falls as a result of a hazardous or dangerous condition on someone's property.

Slip-and-fall injuries, according to the National Safety Council, are the largest cause of emergency-room visits. If someone hurts himself or herself on your property and files a claim, your rates may rise.

Auto triggers

Unfortunately, it is much harder to pinpoint which types of claims may cause your auto insurance rates to spike.

For the consumer, automobile insurance is more volatile and very dependent on driving record, age and the types and number of claims, Weston says.

Other rate-increase or policy-cancellation triggers vary from state to state and company to company. However, factors that may be considered include whether you were driving while drunk, whether injuries occurred, and the severity and type of accident.

Some companies have a policy to forgive a first accident, but such rules are not ironclad.

To keep your premiums from increasing, it's usually a good idea to avoid filing a claim if you have accidents or damage totaling $1,000 or less. If you decide to take this approach, be sure to raise your deductible to $1,000, which can lower your premiums.

Paying out of pocket for damage covered by insurance is distasteful to many people. However, a series of small claims can result in increased premiums and possible loss of coverage.

It gets back to the notion of what insurance is all about: bailing you out from a large disaster, rather than the small things that annoy rather than harm.

"There are folks who are so strapped for cash and living paycheck to paycheck that even a minor fender bender would be a catastrophe, and in that case they might want to keep a low deductible," Weston says. "But for most of us, you'd rather have money in the bank and cover the thousand-bucks deductible yourself."

In addition, if you back your car into a telephone pole or another car and nobody is hurt, it might be better to just pay for the damage yourself.

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"My feeling is that if you have a little accident that's under the deductible, yes, your insurance company wants you to report it," Weston says. "But you should at least consider just handling it out of pocket if no one was injured and no police report was filed."

However, a word of caution: If you caused an accident involving other vehicles, you should report it to your insurance company even if the damage to your own vehicle was negligible. The other party may, legitimately or not, file a claim for damage or injury. Having your version of the accident on record will go a long way toward having your insurance company on your side.

Also, many states require accident reports to be filed by the police. If they are, your insurer will find out whether you report it to the company or not.

This article was reported by Mark Terry for Bankrate.com.

Updated Nov. 3, 2009

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