What do you mean it's me and not you?

Those words hurt, no matter who utters them. But they are particularly painful when they come in a "Dear John" letter from your home insurer.

These days, a lot more homeowners find themselves on the losing side of the insurer-insured relationship as companies institute much more stringent rules about which customers they'll keep and which they'll kick to the curb. Many are turning down new business to lessen exposure to risk. And existing customers face an ugly ultimatum: Pay huge premium increases, settle for less coverage, or part ways with us. Oh, and good luck getting coverage from any of our competitors.

What raises their ire? Even the most innocuous actions -- filing a single small claim, or switching insurers to save a few bucks -- can lead to a swift parting of ways.

To keep your coverage intact and your relationship with your insurer solid, here are tips on avoiding the most common coverage "gotchas."

Keep a low profile
Where you live and what the weather forecast says is coming your way might be out of your control. But you can control some behavior that may raise red flags. In the insurance world, any attention is far from flattering -- in fact, even a sideways glance can damage your reputation. Here's how to avoid unwanted attention.

Don't file any small claims: We know you bought insurance so that you wouldn't have to foot the bill for repairs. But it's in your best interest to self-insure -- to pay out-of-pocket with cash from your emergency cushion. A quarter of the companies surveyed by the California Insurance Department had refused to renew policies of those who filed one or two non-water-damage claims in the preceding three years. (More in a moment on why companies differentiate between water and non-water damage.)

Even the smallest claims are scrutinized closely and cost the insurance companies plenty in administrative fees. They don't want to eat those fees, so you can bet that when it's renewal time, they'll get you to pay for them one way (increased premiums) or another (refusing your business).

What's considered a "small claim"? A good reference point is your deductible -- which, if it's not already, should be around $1,000. Raising it from anything lower can save you as much as 25% on your annual premiums. If a claim is less than your deductible -- or even a smidge over -- it's probably best to eat the cost and keep mum. Your altruism may even result in more savings down the road: Many insurers offer discounts for every year a customer does not file a claim.

In fact, don't call at all: Your mother loves hearing from you regularly. Your insurer, however, does not. Policyholders risk being noted as "high-maintenance" (although wrongly) even when they simply inquire about a possible claim. If you do have to ask a question not answered in your policy materials, do it anonymously at first. (Fake a British accent; call from a pay phone.) Today's insurers are skittish. Just asking about filing a claim can put your insurability at risk.

Be careful with water-related claims: As we mentioned earlier, insurers are wary of policyholders who file claims, but they're especially critical of those who report something that is or may turn into water-related damage -- for example, a broken pipe may hint at future sewage or mold issues. Water means ongoing problems. Many companies will take a pass on your business if you make just one or two water-related claims.

Rate-shop with care: If your premiums have been rising a lot in recent years for no reason, that's a sign that your insurer may be trying to exit your market by driving you into the arms of another company. In that case, shopping around for savings is the right thing to do. But playing the field just to shave a few bucks from your annual premiums may not actually save you as much money as you think.

Loyalty has its rewards -- and moving your business may mean sacrificing good-customer discounts you've earned over the years. Making no claims over a three- or five-year period can qualify you for a 5% discount for each year thereafter, typically maxing out at 25% to 35%. Plus, insurers looking to trim their portfolios will often start with newer, more uncertain customers.

Make sure your reputation is solid: The insurance industry bases decisions on whether to do business with you by assessing your risk profile, which includes the frequency and amount of your claims, as well as the underlying reasons for each claim you filed, during the past five years. This information is contained in your homeowner and auto records file. In some states, your credit history is also factored into the equation.

As with consumer credit files, you're allowed to check your file for free once a year, and you should do so to make sure everything's accurate and to contest anything that's not. There are several companies that keep track, but the industry biggie is ChoiceTrust.com's C.L.U.E. report (which is a lot easier to remember than Comprehensive Loss Underwriting Exchange). There's also ISO Insurance's A-PLUS (Automobile/Property Loss Underwriting Service), which shows your car and property claims history through the eyes of an insurance underwriter. (Call 800-709-8842 to see yours for free.)

Don't panic if you don't have any official record on file -- that just means there's nothing to report, which is probably welcome news to both you and your insurance company.

For more on protecting your home, read about: