I want to cancel my claim and pay out of pocket but I’m being told it will increase my insurance anyway.

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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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UPDATED: Apr 3, 2013

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Insurance Question from Cutler Bay, FL

Asked on 04/03/2013

I want to cancel my claim and pay out of pocket but I’m being told it will increase my insurance anyway. I was recently in a no fault accident in a rental car whereby the car was hit by a runaway shopping cart on a blustery day. The total bill was $1043.50. My deductible is $500. I reported it to my insurance company as I did not purchase the rental company insurance. I was going to cancel the claim when I got the bill and just pay the remaining balance out of pocket. My insurance company is saying that even if I cancel the claim this will increase my insurance by $400 per year since they now have record of this incident. Can they do this legally?

Answer given on July 03, 2013

If you reported a claim to your car insurance company and then tried to withdraw it, the insurance company can consider this as a claim and it can affect your insurance rates.You indicate you did not have the insurance with the car rental company, but do have a $500 deductible. That would mean your insurance company would have paid the difference between the damage and the deductible, which is $543.50. Most insurance companies do not increase your rates if the damage they pay out is below a certain amount. This amount varies by state, but you should ask your agent or insurance company what that figure is. It is possible that the figure is above the $543 amount and your rates would not increase whether or not you or the insurance company pays for the damage.You also need to be sure that the rental car company will settle for the amount of damage as sometimes they will charge you for the time the car is out of service due to the damage.


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