Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Written by Rachael Brennan
Licensed Insurance Agent Rachael Brennan

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jun 29, 2022

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In a nutshell...

When you buy an insurance policy, the purpose of having the coverage is to protect your finances when you experience a loss.

As a policyholder, you’re free to file a claim against the coverage options that you pay for so that you can get help to pay for repairs and other related expenses.

If you’ve already contacted your claims department and you’d like to pull the plug on the claims process, there are a few things that you should consider first.

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When does it make sense to cancel an auto insurance claim?


If you’ve had a catastrophic loss or your vehicle is mangled, having insurance is a blessing.

You have peace of mind in knowing that you have a limit of coverage that will pay for third-party damages and another limit that helps pay for your own vehicle repairs.

If you’re in an accident and the cost to repair your car is not much higher than your deductible, you might be better off paying for the first-party repairs out of your pocket.

If you already have claims or tickets on your record, it’s also wise to cancel your claim so that your rates don’t skyrocket, and you don’t lose a Good Driver Discount.

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Are there times where you can be denied the option to cancel a claim?

Insurance companies are for-profit businesses in the finance industry. Every claim that the company pays will take away from the company’s profits.

In fact, some companies will offer their adjusters bonuses if they can settle a claim for little to no money.

Canceling your claim is possible when you file it against your own policy but not when you’re at-fault for an auto accident involving other vehicles and pedestrians.

If you’ve caused bodily injury to someone or you’ve damaged someone else’s property in an accident, that claim can’t be closed until the claim is investigated, and there’s a settlement.

Will a canceled claim affect your auto insurance rates in the future?


Auto insurance rates are determined by analyzing risk factors and determining how likely you are to have a loss.

Your rates don’t go up right away after you file an auto insurance claim, but if you have a chargeable loss, you’ll see an increase in your rates at your next renewal.

If you shop around for coverage to save on your premiums, the other carriers can see this record on your CLUE report and your Motor Vehicle Report.

Since the record will show that no money was paid out by the company, it’s not likely that it will affect your rates.

Know the Damage Threshold for Chargeable Claims in Your State

Most states have damage thresholds.

These thresholds dictate when you need to notify the DMV of a loss and also when an insurance company can raise your rates for a claim.

If you file a claim and it shows no payout, it won’t exceed any state-mandated threshold.

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How do you cancel your claim?

Canceling your insurance claim through your own company isn’t that difficult.

If fault has been designated already, you can call your adjuster and let them know you’ll be paying for your own repairs.

You can even cancel your claim by voiding the check before you cash it. Don’t sign any settlement paperwork if you don’t want to accept the payment.

If the damage to your vehicle is minimal, it’s best to get an estimate to see how much you’ll pay after the claim is paid.

You can even get estimates through other carriers to see if your rates will go up everywhere. Enter your zip code below to get FREE car insurance quotes today!