The answer might surprise you and help save you money.

Ric Edelman is a co-founder of Edelman Financial Engines. The following is taken from his weekly radio call-in show.

Question: We purchased a farm, but the insurance company we were with doesn’t offer farm insurance, so we approached another carrier. That company told us we’re uninsurable because we filed too many claims. However, we haven’t filed any claims!

We merely called our original company a few times to ask about existing coverage on a few things, including a tree our neighbor was worried about.
We merely wanted to know whether our insurance would pay for fixing the neighbor’s fence if the tree were to fall (not that we believed it would fall).
It turns out that, because the company doesn’t have agents, our inquiries were routed to the claims department and were logged as claims. We were shocked. Is this common practice in the insurance business?

Ric: Yes. Asking about a potential claim is the same as filing one. Industry data shows that those who ask end up filing claims more often than those who don’t ask. Even asking your agent (if you have one) can count as filing.

Also, insurers often deny people because of what they are insuring. For example, if the prior owner of your house filed many claims, you could be denied even though you never filed any claims yourself! So you should ask the seller about their insurance claims history on the house before you buy it — to make sure you can buy insurance and won’t have to pay higher-than- normal costs.

You might want to contact your financial advisor (not the insurance company) in the future to inquire about coverages and whether or not to file a claim. That way, if your advisor suggests that filing isn’t worthwhile, your claims history won’t be affected.

It might be possible to get your original insurer to provide a document stating that there were several inquiries without a claim. You could then give that letter to another carrier’s underwriters to get an exception to your uninsurable status.