Should You Cancel Your Auto Insurance Claim?

Filing an insurance claim is usually the first thing to do after an accident, but there are times when it might not be the best choice. Fortunately, you can cancel a car insurance claim in most situations. The only exceptions are if you were at fault or if someone filed a liability claim against you.

There are several reasons why you might want to cancel a car insurance claim. For example, you may find that the damage is less than you anticipated and that you can fix it yourself for a small cost. You may also want to avoid a rate hike, or you may not have enough money to cover your deductible.

If you decide to cancel your car insurance claim, you can simply contact your insurer and inform them that you’re not pursuing your claim. However, it’s important to note that the claim will still remain on your driving record.

If the damage is less than anticipated

For example, if your deductible is $500 and your total repair cost is $525, the insurance company will only cover $25. In such a scenario, you might be better off paying for everything yourself.

You may also want to cancel your claim if you cannot pay your deductible due to financial constraints. If you are unable to pay your deductible, it could delay the repairs needed for your car to get back on the road.

It is important to note that even if you cancel your claim, it will remain on your driving record. This could potentially lead to a hike in your car insurance premium when it's up for renewal. Therefore, it is essential to weigh the pros and cons before deciding to cancel your auto insurance claim.

To avoid a rate hike

There are a few situations where you won't be able to cancel your auto insurance claim. If you were the driver at fault in the accident, you won't be able to cancel the claim. Additionally, if someone has filed a liability claim against you, you are not allowed to cancel that claim. In both these cases, you will have to go through the investigation process and accept the impact on your insurance rates.

The main reason for cancelling an auto insurance claim is to prevent your insurance premiums from increasing. Even if you are not at fault, filing a claim can sometimes lead to a rate increase. Additionally, if you have a claims-free discount or a high deductible, filing a claim can result in losing the benefit of the discount or having to pay a high deductible amount. By cancelling the claim, you can avoid these negative consequences and keep your insurance rates unchanged.

It is important to note that cancelling an auto insurance claim won't remove it from your driver record. The cancelled claim will still show on your insurance file as a withdrawn or zero-dollar claim. While this won't affect your insurance rates, it is something to keep in mind when making the decision to cancel a claim.

If you can't pay the deductible

If you're unable to pay the deductible, you might want to consider cancelling your auto insurance claim. This is a common reason for drivers to cancel their claims, and you can do so by contacting a representative of your insurance provider. It's best to do this sooner rather than later, as cancelling during an investigation is preferable because the insurer hasn't yet made a determination on payment.

You can still cancel your claim after your provider has issued you a check, as long as you haven't cashed it. You'll need to mail the payment back to complete the cancellation. However, if you've been found at fault for the accident, you may not be able to withdraw the claim. In this case, double-check with your broker or insurer.

It's important to note that even if you cancel your claim, the incident will still be listed on your driving record. A cancelled claim isn't likely to increase your premiums, as these generally go up only if the insurer has to pay out. Additionally, if you switch insurance companies in the future, the zero-dollar claim likely won't impact your ability to find a suitable insurer at a similar rate.

If you're facing financial difficulties, it might be a good idea to review your options. Contact your insurance provider to understand their specific policies and procedures for cancelling a claim due to non-payment of the deductible. They may be able to offer alternative solutions or payment plans to help you manage the costs.

If you want to avoid losing your no-claims discount

Secondly, if you have an accident and it's your fault, your NCD could come to an end. However, your insurance provider may reduce your number of years' no claim, rather than wiping it out in one go (this is sometimes called 'stepping back'). This can vary between providers, so be sure to check with yours. If the accident is not your fault, it could still affect your NCD unless you can reclaim all costs from the person who is at fault.

Thirdly, if you take a break between policies, your NCD may still be valid. This depends on your insurance provider and how long it's been since you last had cover. Many providers will say an NCD is invalid if there's a break in your car insurance of two or more years, but some providers may go to three years.

Finally, if you switch insurance providers, you can usually transfer your NCD to the new provider – you'll just need to give them proof of your bonus.

If you can pay for damages yourself

If you can pay for the damages yourself, you may want to cancel your auto insurance claim. This is because filing an insurance claim will increase your risk profile and insurance rates. Your safe driver cashback or no-claims bonus may also be lost.

One of the most common reasons people choose to cancel an insurance claim is to avoid paying the deductible. For example, if the cost of repairs is only slightly more than your deductible, you may be better off paying for everything yourself. If you can't afford your deductible, you may also want to cancel your claim and deal with the repairs later.

Another reason to cancel a claim is if you don't want it to appear on your insurance record. Even if you cancel, the claim will remain on your driving record and could result in a hike in your insurance premium when it's up for renewal. However, a cancelled claim won't increase your premiums, as they generally only go up if the insurer pays out.

If you decide to cancel your auto insurance claim, you'll need to contact your insurance agent. You can usually do this by phone, but some companies may also allow you to cancel online or through a toll-free number. Keep in mind that it's best to cancel as soon as possible, preferably while the claim is still in the claims process.

Frequently asked questions