Why am I even paying for insurance?

[Trent Zimmer]

Building is 100 year old Main Street Mixed-Use Building. I pay about $650/mo for insurance. These buildings can be tough to insure because only a few providers will cover them.  Last night, a tenant overflowed a sink which caused havoc in the salon down below. I had a water mitigation company out(a friend) and he thinks we could get to 10k in just water remediation. I'd expect it be another 5k or so in remodel(floors, kitchen cabinet, etc...). So, 15k or so total. 

In speaking with my insurance broker today, he shared with me that theres some risk in filing a claim because these providers are getting finicky and he's been seeing them drop coverage for people after the claims. One recent example was a gentleman with 4 similar buildings to mine who has never filed a claim in 20 years of coverage with my broker was dropped from coverage on ALL FOUR buildings after filing a hail claim on the roof. 

Here is where I am stuck. My deductible is $5,000. By filing a claim I can have all of this covered by insurance, but risk them dropping my coverage. If I were dropped, he suggested we could try state provided insurance, which "the coverage is not great." to which I argue, does coverage even matter if I am going to be afraid to file a claim every time theres an issue??  

The other option is of course to just pay this out of pocket, but then, why am I paying nearly $8,000/yr for insurance?  

It seems crazy, but I feel like the best option is file the claim, risk losing coverage but get this issue covered, then find some catastrophic/liability plan only and ride it out?  

Insurance is a racket.