When disaster strikes - you crash your car or emerge from a shopping mall to find the car gone, or thieves clean out your home when you're away for the weekend - you're grateful for your short-term insurance.The rest of the time it's a grudge purchase and one that many people are cancelling in a desperate bid to make ends meet.It's a saving that comes with a huge risk, of course.But it's not just consumers who are choosing to cancel policies on their cars and household contents: often the insurer decides to end the relationship after one claim too many, with devastating effects on the "dumped" consumer.Take Deborah Petersen's case.She took out comprehensive cover on her car and house contents with Hollard through a broker in July, having been insured by another major company for the three previous years.Three months later Petersen was involved in an accident and her two-year-old car was written off. The payout was R260000.Unluckily for her, the replacement vehicle was only three months old when a motorist damaged its bumper while it was parked and unattended.So she filed another insurance claim and it was repaired.Petersen describes both claims as "beyond my control".But last month Hollard sent her a letter telling her of the company's intention to cancel her insurance from June 1 because of her "deteriorating claims trend"."Is this allowed?" Petersen asked In Your Corner."What is the point of insurance if it's going to be cancelled after a few claims beyond your control?"Petersen got her driver's licence in 1989 and the accident claim of last November was her first.Ironically, for 10 years prior to 2012, her car was insured by Hollard under a policy in her husband's name, with the premium being paid by her every month, without a claim.For a consumer the impact of being dumped by an insurer is severe: they are required to disclose that their previous insurance was cancelled, which makes them unappealing to a prospective insurer, so at worst they can't get new cover and at best it comes at a high premium.I asked Hollard whether Petersen could have avoided her policy being cancelled had she not claimed for the bumper damage and whether a client's "liability" or lack of it was a factor in weighing up whether to cancel their policy.Responding, Hollard said it had "the full right" to cancel any policy with 30 days notice and "a valid reason"."Unfortunately, Mrs Petersen had a poor loss ratio and this was the main decision why we decided to cancel her policy."All claims affect a client's loss ratio. All insurers ask prospective clients to disclose any incidents in the previous three years, whether reported and claimed for or not.As for "liablility", when a third party was involved "apportionment of responsibility" was applied to any claim involving two or more people, Hollard said."There was almost zero chance of recovery in both instances as in the first claim the third party was not insured and in the second claim there was no third party detail available or proof of any third party detail."Whatever the reasons, the result has been devastating for Petersen.When I spoke to her on Friday she had yet to secure short-term insurance from June 1."I have two brokers looking for new policies for me. One will have me paying a premium R1000 more than my old one, and the other came at double the premium!"Not insuring her car is not a valid option, Petersen says."Never mind people crashing into you, there's the deteriorating state of our roads; hitting a pothole could cause huge damage."Petersen is now loath to drive her car more than absolutely necessary."I want to go to work and back home, and otherwise not leave the house. That's how I feel at the moment."WHAT TO DO . . .To reduce your chance of being off-loaded by your insurer:Never admit liability to any third party involved in an accident;Obtain as much as possible information of the third party at the scene of the accident and before leaving the scene to assist your insurance company in a successful recovery. This includes ID and driver's licences of the third parties and their residential and business addresses.The bigger the potential of recovery on all claims, the lower the risk of cancellation; andIt is often not worth claiming for small stuff as it does affect your loss ratio.CONTACT WENDY:E-mail: consumer@knowler.co.zaTwitter: @wendyknowler..