Yesterday, someone broke into my garage and stole my one-year-old mountain bike. I am devastated, because I used it to go almost everywhere! My insurance policy is on a replacement cost basis, so how do I go about making a claim to my insurance company? -- Forced to Foot it

Dear Forced:

If you do decide to proceed with your claim, take the following steps:

• As soon as you can, advise your insurance representative, in writing, of what happened and when.
• Whenever the loss or damage is due to malicious acts, burglary, or theft, you must notify the police immediately.
• Take all reasonable steps to prevent further loss or damage. In your case, that might mean removing any other valuable items from your garage, and securing the door until it can be repaired or replaced.

Your home insurance will likely cover your stolen bike, but before you put those claim wheels in motion, here are a few points to consider:

• Don' t make too many claims: Insurance companies are always concerned with the number of claims made within a certain period of time (usually five years or less). In fact, the amount of the claim is not as important, in their eyes, as how often you make a claim. If you make more than one or two claims within this time period, the insurer might either restrict the terms of your policy upon renewal or they may not renew your policy at all. And if that happens, you will probably have to turn to one of the few insurance companies that specialize in so-called "high risks." They'll sell you a policy all right, but it will be on restricted terms and at a much higher premium. Therefore, if you have made any recent claims under your home policy -- and even if you haven't -- you may want to think twice about making this one.
• You'll have to pay the deductible : If the loss or damage amount is relatively minor and does not exceed the deductible by an unmanageable amount, you are probably better off not to make a claim. In this case, if your bicycle costs, say, $1,200 to replace, and your deductible is $500, it may be worth it for you to make a claim for the sake of $700, but keep it in mind for less significant losses.
• Your coverage may be limited: in addition to the deductible, most insurance policies have a dollar limitation that applies to individual losses. Your limitation, for instance may be $500 for "each bicycle." So, if your bicycle costs $1,200 to replace, your insurance company will subtract the $500 deductible, leaving a claim of $700, which is then further reduced to the $500 limitation amount.

To claim or not to claim? The choice is yours. But as a general rule of thumb, if you can afford to pay for your loss or damage out of pocket, you are probably better off to do so. After all, insurance is intended to pay for large losses that you couldn't pay for yourself. I know that a loss of several hundred dollars is not exactly pocket change, but if you are ever unfortunate enough to suffer a major loss, that's when your insurance will really pay off. So save your claims for the big ones, and don't sweat the small stuff.