Insurance Claim or Not?

[Chris Martin]

As a general rule, when do you decide 'yes, I am going to make a claim' regarding hazard insurance on a non-owner occupied property? With a $1,00 deductible, is there a good 'rule of thumb' for making a claim? Obviously if the the damage/loss is $1,000, there is no way to justify a claim. Likewise, $58,000 in fire damage... then, 'yes'. But where is the line? I understand that insurance companies could drop coverage (all coverage?, via CLUE (Comprehensive Loss Underwriting Exchange)) after X claims are made, X being any number greater than zero. I don't know how they decide to do this. But making a claim probably sets you up for higher premiums in the future.

I'm thinking the number is between $3K and $5K or so... just curious as to your take.

[Jason T.]

When using individual policies insurance companies can drop the coverage or, more likely, increase your premium come the next renewal when a claim is filed. Unfortunately, the claim will effect how other insurance companies price you too because they'll want to know.
I would suggest putting your properties into a master commercial policy where this doesn't happen. There are programs designed for real estate investors that work on master policies. Multiple investors insure their properties on the same master policy but each property and investor is separate when it comes to billing. By having a large pool of insureds and properties you won't be hurt near as bad from claims than if you were on an individual policy. Master policies also allow for added conveniences like monthly billing, easy movement of properties from rehab to vacant or rental, and claims management.
If you keep your properties on an individual policy then the answer to your question is really up to you. You can't foresee how an insurance company will react to a claim, big or small. Unfortunately, there's no good answer other than do what you're most comfortable with.