Sam Mayer, a physician in suburban Chicago, had insured his home, car and life with Metropolitan Life Insurance for 10 years without ever filing a claim, until a damaged roof and a burglary led to two claims totaling $3,000. Mayer promptly installed a home-security system. But instead of giving him a discount, the company dropped Mayer from its preferred coverage, citing his “claims history” and instead offered him its standard carrier at a higher rate — even though his risk profile hadn’t really changed.

(”Homeowners insurers may sometimes offer a change in conditions of coverage of a consumer’s policy at renewal in order to continue to offer a policy to that individual whose risk profile has increased,” a MetLife spokesperson says. “This often occurs when a customer files more claims than average in a short period of time.”)

Indeed, almost all insurance companies slot their policies into different categories, based on a variety of factors, including your credit scores and the location of your home. But even if your risk profile doesn’t change in any substantial way, you might still be shifted from a company’s preferred carrier to its more expensive counterpart, says Jim Davis, a retired public-information director of the Texas Department of Insurance.

“If you’re not in the preferred carrier, ask why,” urges Davis. Your agent — or even the insurance company itself — may be able to move you into a more favorable slot. Also, it’s worth shopping around. A home that may be considered “high risk” for a small regional carrier could actually be deemed “preferred” by a bigger outfit such as State Farm.

2. “Anything out of the ordinary makes us really nervous.”

Everyone knows that if your home is near the water or in an earthquake-prone area, insurers will shun you. Regulators can’t do much about that. But some insurers use illegal underwriting guidelines to redline — the industry term for “discriminate against” — certain groups or locations.

For example, agents say they often get memos identifying undesirable ZIP codes or reminding them to stay away from couples who are having problems in their marriages. Bob Hunter, the director of insurance for the Consumer Federation of America, describes his “favorite” memo from a company advising its agents: “Before writing a policy, drop by the house after work hours and see if the owner is sitting on his porch in a T-shirt and drinking beer.”

If you think you’ve been discriminated against, raise a fuss — as did an elderly woman who was purchasing a home with a companion. She was denied coverage due to “an additional nonrelative listed as the named insured,” even though all other information was acceptable under company guidelines, according to the agent’s report. The woman contacted an attorney and the American Civil Liberties Union. The response: The insurance company said it had made an error and immediately offered coverage.

3. “One wrong move and we’ll drop you . . .”

As insurance companies tighten their belts, they’re getting to be even more particular about whom they’ll cover and whom they won’t. You could potentially file just one claim and get tossed out, or you may not have to file a claim at all to have your coverage terminated. And once you’ve been dropped, very few insurers will want to touch you.

“Insurance companies are cold and hard,” says independent agent Michael Grace of Baton Rouge, La. “They believe that if you get hit once, you’ll probably get hit again.”

That’s what Mike Martin discovered after his Labrador took a nip at an appliance repairman and his insurance company paid out a claim. When his policy came up for renewal, he was shocked to learn that he was being dropped. Martin, a Maryland financial planner, says he spent the next couple of weeks frantically calling up insurance agents to get a new policy. But since dog bites are a red flag for insurers, he was frozen out.

Alarmed by his lack of coverage, the company holding his mortgage forced Martin to join a special “insurance pool,” which cost five times as much as his original policy. It wasn’t until he filed a complaint with the Maryland Insurance Administration that he got his original policy reinstated.

“I’ve seen people being discarded by their insurers for reasons much less ominous than a dog bite,” the consumer federation’s Hunter says. Some will drop you if you start an at-home business, while others will label you too risky if you’ve missed a credit card payment or two.

4. “. . . especially now that Big Brother is watching.”

Privacy isn’t so easy to hang on to in the information age. When it comes to home insurance, companies now have access to their own version of a credit report that reveals all sorts of information about you, sometimes even including past behavioral patterns. The most pervasive source of information is called the CLUE report, short for Comprehensive Loss Underwriting Exchange, which enables insurers to check the claims history of both the homeowner and the property being purchased in order to assess the risk of loss.

Insurers contend that they need such services to weed out dishonest customers who attempt to hide their claims histories. But the problem is, even when you have had legitimate claims in the past, you’re guilty until proved innocent, says Linda Ruthardt, a former commissioner of insurance for Massachusetts. Once a person has been branded a high-risk applicant and rejected by one insurer, others are not likely to provide coverage.

5. “We’re more secretive than the CIA.”

Here’s a little test: Call your insurer and ask how many claims it would take for the company to drop you or deem you “risky.” Chances are you won’t get much of an answer. Even if your insurer has written guidelines, it’s under no obligation to share them with you. And when an insurer doesn’t have written guidelines, its decisions can border on the arbitrary.

“It could take some middle manager glancing at the company’s loss records to decide that the cutoff should be lowered from three claims to two claims,” says Ron Sundermann, an independent agent in Cedar Rapids, Iowa. And agents won’t get a bulletin to notify them of the change, so they have no way of advising a client on whether to swallow the cost of a $1,000 roof damage or pass it along to the insurance company and be penalized for it.

Sundermann learned the hard way: Over three years, a customer with a stellar record filed four small, legitimate claims totaling less than $5,000 and was dropped by his insurance company. When Sundermann pleaded his customer’s case, he was reminded that it was the frequency of his customer’s losses, not the severity, that made all the difference. The lesson? Filing one big claim may well land you in less trouble than four small ones — all the more reason to get a large deductible and pay for the smaller claims out of your own pocket.

6. “You’re paying too much for your policy.”

When it comes to your home, the last thing you want is to be underinsured.

But could you actually be overinsured? It happens a lot, regulators contend. And when it does, it’s often the mortgage lender’s fault. For instance, a bank may require that your insurance cover almost the entire value of your home, including the land — which doesn’t make a lot of sense, because land doesn’t burn down — when what you really want to cover is just the house.

If you’re like most homeowners, your policy’s rate gets raised every so often to account for inflation. But read the numbers carefully: Your rates may be quite a bit higher than the actual inflated value of your home. Insurers also inspect homes every so often to check on any additions. But that doesn’t mean they get the last word — Jim Davis’ insurer jacked his premium way up after inspecting his house. But by challenging the inspector, Davis brought down the home’s valuation by several thousand dollars.

“They were factoring in an uncovered porch area,” scoffs the retired Texas insurance official. “That’s an open space, not an area that would need replacing.”

If you think your rates are higher than they should be, ask your insurance agent to come out and assess the home and try to come up with a more reasonable number, the consumer federation’s Hunter says. Also, if you know the square footage of the house, speak with a builder and ask what it would cost to rebuild a home like yours — that’s the amount that should be used to determine your insurance premiums.

7. “You’re probably covered for a lot less than you think.”

Rick and Anne Morrissey of Indian Hills, Colo., were sitting quietly in their living room one day when they heard a tremendous crash in the backyard. Rushing outside, Anne was shocked to see that two giant elk had come along and demolished their children’s swing set. They were even more shocked when their Allstate adjuster called — damage by animals isn’t covered by most insurance, and it’s only one of the many surprises you might discover in the fine print on your policy.

That’s also why after Hurricane Katrina even homeowners with flood insurance found that the personal belongings they’d lost in the storm weren’t covered. Thomas Martin, the founder of national advocacy group America’s Watchdog, lost $300,000 in possessions when a nearby levee broke and all things on the first floor of his home — including jewelry, computers and flat-screen TVs — were destroyed by “a toxic soup of sewage and oils.” Had he known to take out the Federal Emergency Management Agency’s supplemental-contents coverage in addition to his flood policy, Martin says, some of his destroyed valuables would have been covered.

Among the most commonly misunderstood parts of any policy are the ways it handles missing objects, says David Thompson, an independent agent in Vero Beach, Fla. If you drop a piece of jewelry down the drain, for example, it’s generally not covered, but if you leave it by the sink in a public place and it’s not there when you return, most policies will treat this as a theft and reimburse you for the loss.

8. “We like some of our agents — and their customers — better than others.”

Insurance companies will tell you that any authorized agent is a good agent. But in truth, they play favorites, giving preferential treatment to those who generate the most business, have customers with the fewest claims, or both. And they offer them elite status: State Farm, for instance, includes its preferred agents in the President’s Club.

Why should you care? Because buying through one of these favored agents can pay big dividends to consumers. The chosen few tend to have increased flexibility on pricing and, more important, greater leeway on underwriting guidelines. For instance, American International Group used to insure boats that traveled only 50 mph or less. But when Baton Rouge, La., star agent Michael Grace took on a client with a speedboat, he convinced the company to underwrite it.

The special treatment applies to claims as well. Says Sean Mooney, the chief economist at Guy Carpenter & Co., which advises insurance companies about risk: “When a claims situation comes up, (a preferred agent means) you have a friend in your court.”

Other advantages preferred agents enjoy: They may have an easier time retaining someone who has had claims and would otherwise be canceled, and they can often get their clients moved from a company’s standard carrier to its preferred one.

9. “We’re biased against older homes.”

You have your eyes set on a beautiful period home built in the 1940s, with original slate roofs and fluted ceilings that looks like something out of Architectural Digest. It sounds lovely; now try getting insurance. Insurers are increasingly clamping down on “mature” homes, even when they’re only 30 or 40 years old.

“In Texas, a 1953 house is considered ancient,” says Yvonne Darrah of Austin, Texas, who called at least 10 insurance companies before she could find one that would insure her 32-year-old home at a reasonable rate. “We were desperate,” she says.

Even if you do get insurance for your older home, you may not get the best kind. Some companies won’t sell “guaranteed replacement cost” policies — coverage that will pay whatever it takes to restore your home exactly as it was — in neighborhoods where property values are declining or where the property is old. You could end up with coverage that’s limited to only a few risks. Or you might be offered “cash value” coverage — these policies will only cover the cost of replacing what’s damaged, minus depreciation.

“If you had a kitchen that was built 20 years ago and it’s destroyed, the cash value is no help,” says Mary Griffin, former insurance counsel at Consumers Union.

10. “You need to check up on us — and it’s easy.”

Insurers may not be the most forthcoming companies in the world, but thankfully, you can find out a lot about them. Your first stop ought to be your local library, where you’ll find ratings reports from agencies such as A.M. Best, Moody’s and Standard & Poor’s.

You might be surprised at what you can get from your state’s insurance department as well. Texas and Missouri, for example, have Web sites with information on the latest rates in different areas and tips on how to file a complaint. If nothing else, a phone call to the state will let you know what other consumers think of your insurance company.

“We can’t recommend agents or companies, but we can certainly tell you the number of complaints filed this year,” says a spokesperson for the Nevada Division of Insurance.

We asked experts to weigh in on some of the most common mistakes investors make, and while it’s easy to see that chasing hot stocks (the most frequently cited mistake) would be an exercise in futility, they reported other less obvious pitfalls to watch out for.

There are never any guarantees when investing, but avoiding these 10 missteps will better your chances of success.

1. Mismatching investment with goal

Need that money in the next couple of years? Don’t put it in a hot emerging-markets fund. 

Consider when you’ll need access to your money. This will help you avoid unnecessary transaction fees, penalties and risk.

“If you pick the right investment vehicle for the right timeline, you’ve got it 90% in the bag,” says Richard Salmen, a certified financial planner and the national president of the Financial Planning Association. “If your goal is only six months to two years off, you don’t want to put your money in an investment vehicle that could fluctuate enough that you might miss it.”

For some goals, such as paying for college, it may make sense to use a mix of investments.

“If you are saving for college and your child is within three years of going to college, you’ve still got seven years until that last year of college,” she says.

So while the bulk of short-term college savings should probably be very safe in CDs or short-term bonds or a high-yielding savings account, maybe some of that money could be invested in stocks. “Just remember the rule of thumb,” she says, “that money you’ll need within five years shouldn’t be in stocks.”

2. Discounting fees

Fees may sound minuscule at 1% or 2%, but they can gouge your returns by thousands of dollars.

 ”It’s hard to beat the stock market,” says MarksJarvis. “There’s one thing you can control and that’s what you pay to be a part of the stock market, and that’s where the expenses come in.”

While all mutual funds have expense ratios, which cover investment advisory, administrative services and other operating costs, some are much higher than others.

“Let’s take a $10,000 investment that earns an annual return of 8% before expenses for 20 years,” says Greg McBride, a senior financial analyst for Bankrate.com. “If the money is invested in a fund with an expense ratio of 1.25% instead of an index fund at 0.25%, the investor would incur an additional $4,128 in costs over that 20-year period. But the ending account value of the higher expense fund would be $8,000 less than if invested in the lower expense fund because of the loss of compounding on the money paid out in expenses each year.”

To complicate matters, some funds impose sales charges or loads. Load funds are available only through an investment adviser or broker who is compensated by sales commissions.

Picking no-load funds is one way to save money on fees. Instead of going through a broker, call a mutual fund company directly to purchase a fund.

“If you were paying your broker 5.75% for a load, you would say to yourself, ‘Well, that’s the cost to play, I might as well pay it,’” says MarksJarvis. “But if you were putting $10,000 into the fund, that would mean you were giving your broker $575 to pick that fund for you and that you were putting $9,425 to work.”

While it might be worth paying a load if you don’t have the time or inclination to make your own investment choices, just remember, it’s hard, even for a skilled money manager, to make up for those extra fees.

“The fees will be higher for those funds,” says John Pallaria, an adjunct professor in the CFP program at Boston University, “but in return, they’re getting competent advice which will, in theory, give better results to offset the cost.”

For no-load mutual funds, investors should aim to keep their annual expenses under the following thresholds, according to McBride:

• Active domestic equity: 1%.

• Active international equity: 1.25%.

• Active bond funds: 1%.

• Index equity/bond: 0.5%.

3. Letting investments languish

If you’ve arranged to have money siphoned out of your paycheck directly into a savings account — pat yourself on the back for taking that step. But don’t stop there.

Saving money is a great start, but if you’re not investing it wisely, you’ll miss out on long-term gains, says MarksJarvis.

She illustrates this point with the example of a 35-year-old who, by holding $30,000 in a savings account until she retires, will have $46,000 after earning interest and paying taxes (assuming a 2% average annual return and a 25% federal tax bracket).

“On the other hand,” MarksJarvis says, “if you put that same $30,000 into a 401k or an IRA, you wouldn’t be paying taxes on the money as it builds up year after year. By investing in a simple stock market (index) fund, that very same $30,000 would likely, if it followed history, turn into about $540,000 (assuming retirement at age 65 and an average annual return of 10%).”

4. Paying taxes

Why give Uncle Sam money any earlier than you have to? Instead, put your money to work for you.

In the above example, what if the investor bought the same mutual funds in a regular taxable account instead of investing in an IRA?

MarksJarvis explains: “If they earned the same return on their investments, instead of having $540,000 they would end up with about $260,000 because it would be taxed. This again assumes a 10% average annual return, retirement at 65, and a 25% federal tax bracket. Taxes take a huge amount out of the wealth that builds up year after year after year.”

People sometimes forget to factor in the upfront tax benefits of 401k plans, says Salmen. “One of the typical mistakes that I see people making is paying extra on their mortgage but not funding their 401k or putting enough into it. Mortgage interest is usually your cheapest interest rate and there are tax deductions on top of that. Money that you put into a 401k, you’re getting an upfront tax deduction on,” he says.

Of course, you’ll have to pay taxes eventually — but not until it’s time to take withdrawals from your tax-deferred retirement plan.

5. Failing to strategize

It’s time to pick funds from your 401k lineup. All you do is pick the ones that performed the best, right?

Wrong. Before you research the investment, there are a couple of things to think about. First, plan your investment strategy.

“For any investment program, sometimes people jump right to the investment they choose,” Pallaria says. “But they need to determine what asset classes they want to cover before jumping to investments. Once you’ve got the asset classes, now go pick the investments that are best in these categories.”

Next, make sure you’re comparing apples to apples.

Some funds don’t make as much money as others — by design. A bond fund cannot compete with a stock fund because of the nature of their respective holdings. However, different types of funds serve different purposes. The bond fund can have a stabilizing effect on one’s portfolio.

“For example,” MarksJarvis says, “someone might have a bond fund that perhaps an adviser put them in because that’s supposed to be the safe part of their money. And they’ll look at it and they’ll say, ‘Well, I’m only making 4% in that fund and I have this stock fund that’s up 12%. Why not go with the 12%?’

“Well, there’s a perfectly good reason,” she says. “That 12% money is not going to be as safe.”

6. Misreading the label

You bought a bunch of different funds — so that means you’re diversified, right? Not necessarily.

You don’t want to find out that you’re overexposed to a particular market sector after it hits a rough patch. Luckily, staying out of this trap is a matter of learning to read the label.

“One of the typical mistakes that people make is they get a list of mutual funds from their employer and they can’t tell the difference between them. They don’t know the vocabulary”.

Understanding the different types of asset classes will help you strategize (see Tip No. 5). Different asset classes do better at different times. Bonds may do well while the stock market is suffering and large-cap firms may weather tough times better than spunkier small caps. Boring bonds will never match stocks in a hot market and small caps may be better poised to take off like a shot than their larger, lumbering counterparts.

7. Neglecting research

Psssst. Wanna hear a good stock tip?

No, we’re not going to tell you about the next Google. We’re going to tell you to do your homework.

What to look for:

• Type of fund (large-cap growth, small-cap value, etc.).

• How long the manager has been there.

• How much the fund costs (expense ratio).

• Minimum investment required.

• Portfolio holdings (list of securities).

• Performance information — remember, past performance does not guarantee future return.

Where to look:

• Ask for the prospectus from the fund company or brokerage firm. This information is often available online.

• Get a copy of the most recent semiannual report (again, you’ll likely find it online). These reports frequently feature a letter from the portfolio manager. His or her discussion of the past six months will give you an indication of how he or she runs the fund. A good manager discusses both victories and mistakes.

“When making investments, look to invest in the company and not the stock,” says Shashin Shah, CFA, CFP with SGS Wealth Management in Dallas. “Research the company. Look at the Internet, anywhere from MSN to Yahoo Finance; purchase research reports. If you’re investing $1,000, you might want to spend $5 to read a research report. Get information from the broker and how they made the picks. Order the company report.”

Similar advice applies when you research mutual funds. Sometimes the fund name can be misleading, so you can’t judge by that.

8. Putting it off

Retirement is decades away. You don’t need to worry about it, right?

In the world of saving, procrastination is your worst enemy. If you’re smart, you’ll get started early.

According to MarksJarvis, in order to accumulate $1 million at retirement, you’ll need to invest just $20 a week in a simple stock market mutual fund when you’re 19, about $100 a week if you wait until you’re 35, and roughly $300 a week if you delay until age 45, assuming a retirement age of 65 and an average annual return of 10%. (Of course, while 10% is in the ballpark of how the market performed historically over many decades, there’s no guarantee that it will continue to do so.)

“Of course, you can catch up,” MarksJarvis says, “but then you have to dig in deeper and it’s actually a little more painful than if you were just saving small amounts to begin with.”

But don’t ever give up. A person who, at age 45, has accumulated $30,000 can still end up with a nest egg of about $460,000, if they put away $5,000 per year for 20 years, points out MarksJarvis. This assumes an annualized return of 9.6%.

Many people delay investing because of debt, says Salmen, but there’s no excuse not to take the easy pickings.

“Some people want to invest money but say, ‘I’m not going to do it until I get my debts paid off, and it makes sense.’ For most people, they’re never going to get there,” he warns.

“At the very least, you should be taking advantage of the company matches in your retirement fund, which deliver a guaranteed 50% return on investment in the first year. That’s free money. I don’t know anywhere else you’re going to get those kinds of returns.”

9. Ignoring your portfolio

Buy and hold can be a smart strategy, but buy and ignore won’t serve you in the long run.

“I’ve had new clients walk in with statements in a box and they haven’t even opened their statements,” laments Shah.

Without reviewing your holdings, you won’t know if your portfolio remains balanced, and you won’t shift your holdings to achieve new goals or help you cope with changing life events.

The experts differ on how often you need to do a portfolio review. Shah recommends doing so on a quarterly or semiannual basis. Salmen meets three times a year with his clients. But all agree that it’s important to review your holdings at least once a year, whether they’re within a company-sponsored retirement plan or outside of one.

“Perhaps you’re invested 80% right now in equities, and realize, ‘I need to think in five years now instead of 10 because I want a vacation home’ or ‘I got laid off.’ If you’re looking at your investments regularly, you can shift to fit your circumstances,” says Pallaria.

10. Getting emotional

The market is ricocheting all over the place, and when the boss isn’t paying attention, you’re online buying and selling in a frenzied attempt to dodge the bullets.

“Emotion, both greed and fear, drive more of the decisions than anything else,” says Salmen.

He describes the all-too-common trap emotionally driven investors fall into: “Most people don’t earn what the market earns. They invest too heavily in too-risky investments that are doing well, then drop out when they go back down. They take all their money out of tech stocks, for example, put the money into bonds, then put money back in stocks after prices have gone back up.”

His prescription is to invest a little bit of money from every paycheck, diversify, then leave it alone.

Pallaria recommends taking yourself out of the equation as much as possible. “The best thing that people can do to make it easy on themselves is to automate investing as much as possible. Have the money automatically taken out each month or each quarter. That’s absolutely the best way,” he says.

Called “dollar-cost averaging,” this autopilot strategy enables you to buy more shares when the market is down — and that’s the whole idea behind buying low.

You can also use an online insurance quote form for quick comparisons. Commercial insurance quotes will save you a lot of time, and probably, a lot of money. You may also be able to find business insurance discounts for things you already do to protect your employee’s safety and property.