Q: If I have several claims on my homeowners policy, will I be penalized by the insurance company? After all, isn't that what I buy insurance for?

A: Yes, you will be penalized. Your premiums will rise considerably, and, if you had several claims, the insurance company may well choose not to renew your coverage when it comes due.

That's why it's not a good idea to claim for minor damage on your property policy. Since you have to pay the deductible (the portion of the claim that you agree to pay), it probably isn't worth it to make a small claim anyway. Save your claim for a major loss that you cannot afford to pay out of pocket.

Why, you ask, should I pay for a loss myself when I buy insurance for that very reason? That's a good question. But don't think of insurance as a cumulative payment that adds up over the years; think of it as buying protection for a one-year period against a large loss. If you ever experience a devastating loss, that is when insurance really pays its way.

The concept of insurance is to respond to the financial hardship created by major claims.