If you submit an insurance claim and then decide you no longer want the insurance company involved, you are allowed to close your claim. A few things to keep in mind...
- This has been my general experience over 20+ years and applicable to all companies we represent. Could there be a situation where you are NOT allowed? Of course. That's insurance- with the exception of definitions there are always “it depends” situations. My suggestion? If you're curious, just ask your agent for the answer. Better to know than to guess
- I have not seen a time limitation either. So for example, you could close your claim 1 day after submission, or 1 month after submission. Again, your company may be different, so when in doubt- ask. Now, does it make more sense to close in the early stages of your claim? Of course. It's best to do your research and close it a few days in than several weeks later.
Top Two Reasons You Would Close Your Insurance Claim
Here are the most common reasons you would close your claim.
Reason #1: Your damages are less than your deductible
Many times when you have an accident or suffer damage to your property, your first instinct is to turn that claim in. Then you get the estimate to repair the car or the house, or whatever is damaged and discover that the damage is less than your deductible. Your deductible always applies first, so if it's less, you essentially don't have a claim and the insurance company will close it.
Helpful Tip: Unless the situation is a true emergency (think a house fire or a serious accident with injuries), and you don't have a good idea of the dollar amount of damage, it's best to get those estimates for repair BEFORE you turn the claim in. Then you can make an informed decision. You may discover the damages are less than the deductible, so no claim. Or, you may discover it's just a few dollars over the deductible and you're better off paying out of pocket. We've had many instances where the insured has $1000 deductible and the damage is $1500. The insured will often decide to pay out of pocket instead of turning the claim in. Save the insurance for the true catastrophe, when the difference may be tens of thousands of dollars as opposed to $500.
Reason #2- The at-fault party has taken responsibility and is now working with you to fix your damage
In the case of auto accidents, sometimes there is a delay between when the accident happens and when the at-fault party's insurance company accepts responsibility. Maybe you just can’t wait due to a non-driveable vehicle, so you decide to open a claim under your policy to get you back on the road quicker. Provided you have the appropriate coverage on your policy (usually collision and/or rental reimbursement), your insurance company will work to settle your claim.
While this is happening, the at-fault company contacts you and is prepared to take care of the damage. You can certainly close the claim with your company if you choose and let the other company make payment at that time. Or you could let your company finish, and then they would subrogate against the other party to recover the money paid. The ultimate choice is up to you. You can read the definition of subrogation in our insurance glossary.
Super Helpful Advice: Don’t Turn In a Claim Unless You’re Absolutely Sure
You may think that if you turn in a claim, then decide a day later to close it, it's either a) erased or b) as if it never happened. 9 times out of 10, that is simply not true. Insurance companies report claims to a central database called CLUE (Comprehensive Loss Underwriting Exchange). When you apply for new insurance, a CLUE report is run by the new insurance company and any reported claims will appear. In the case of one that is open, then closed, it will appear and show $0 payout. These claims could affect your ability to get a new policy or one without surcharges.
We just had this happen. A potential customer was looking for homeowners insurance. She mentioned she had turned in two claims within 3 years, but neither one had any payout. The fact that both showed up as submitted claims made her ineligible.
So it's really important to not just turn in a claim every time there's a slight issue. Because insurance companies will make acceptability decisions based on this history. Get advice and guidance from your insurance agent, do your homework, THEN decide if your situation truly warrants turning in your claim.
Of course, if there’s an emergency such as a fire or an accident with serious injuries, you shouldn’t hesitate to get the claim going. But for minor issues, it’s best to get those estimates BEFORE you turn in the claim.
Interested in additional helpful information concerning insurance claims? Here’s a list of articles we’ve written. Check them out.
How do homeowners insurance claims work?
Questions to ask BEFORE filing an auto insurance claim
What should you do if you have an auto accident? Here’s a checklist
And a detailed downloadable report- What You Need to Do Before and After Filing an Auto Insurance Claim to Make Sure Your Claim is Paid in Full and Promptly
The moral of the story
So generally speaking, if you open a claim, you have the ability to close it. However, you will want to do your homework BEFORE you turn in the claim, as opening and closing it does NOT usually erase it from existence. This could cause problems with your current insurance company, and even more likely with a possible new company. As always, check with your agent/company for specifics.
Wish you had an agent that offered this kind of advice when you have a claim? Someone who wants you to make the best decision based on your situation? We work hard to educate our customers at claim time so they do what's right for them now and in the future. Give us a call or request your quote. We’d love to help!