There are several reasons why you might want to cancel a homeowners insurance claim. It is not a complicated process, but before you decide to cancel your claim, the best practice is to discuss the pros and cons with a claims representative from your insurance company.

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Reasons for Not Filing a Homeowners Insurance Claim

You can cancel a home insurance claim if you do so before the insurer has begun the claims process with a claims adjuster and if it has not yet paid out anything on your claim. There are several reasons you may want to cancel your home insurance claim

Here are a few reasons why canceling your claim may make sense.

  • The property damage to your home is less than your insurance deductible. In this case, filing a claim with your home insurance company doesn’t make sense. 
  • You want to avoid having an unnecessary claim on your claims history. Know your deductible before you file a claim. If the cost for repairs is less than your deductible, completing the repairs yourself will avoid having any unnecessary claims on your claims history.
  • You don’t want to lose your claims-free discount associated with a policy combining home and auto insurance. Some companies give policyholders a discount for combining home and auto insurance with an added discount for having no claims. Filing a home insurance claim or car insurance claim could potentially cause you to have higher premiums on both your home and auto insurance policies if you lose the claims-free discount.
  • You’ve had multiple home insurance claims within the last three years, and the home insurance company may classify you as high-risk. In evaluating home insurance premiums, the insurance company will look at your claims history. If there is a substantial increase in the number of claims in a short time frame, your home insurance premium could potentially increase.
  • The claim you are filing is due to a maintenance issue. If the insurance adjuster determines your claim was maintenance-related, it will not be covered. Home insurance does not cover maintenance-related damages to your home, such as roof damage, water damage due to leaky plumbing, or termite infestations. It is up to you to do regular maintenance on your home.
  • If you file too many home insurance claims, there is a possibility your insurance company could issue a non-renewal on your policy, leaving you without home insurance coverage. You don’t want to go through the hassle of having to buy a new policy because your coverage was canceled. This could also make it difficult to find a new home insurance policy or even secure a loan with a lender or mortgage company.

How to Cancel a Claim with Your Insurance Company

Once you’ve decided you want to cancel your home insurance claim, you will need to contact your insurance provider with your name, claim number, and why you wish to cancel your insurance claim. Your claims representative will explain the claims cancellation process, including any documentation you may need to provide. Most insurers do not charge a fee for canceling a claim. 

How Canceling a Claim Affects Claims History

It is important to remember that even though you have canceled your claim, the report may remain on your claims history or the comprehensive loss underwriting exchange (CLUE) report. The CLUE report contains details of all your claims history within the last seven years. Insurance companies may access this report and use it to determine the premium you are charged for insurance or whether your current insurance policy premiums will increase. 

If the incident remains on your CLUE report even after you cancel your claim, it will be listed in the clue database as a zero payout claim. Most insurers will not raise your premium for a zero payout claim.

The Federal Equal Credit Reporting Act allows you access to your CLUE report free of charge. You can obtain a copy of your CLUE report by calling 1 (866) 312-8076 or requesting by mail from CLUE Inc., P.O. Box 105295, Atlanta, Georgia, 30348-5296. 

Frequently Asked Questions

Will filing and canceling a claim affect the premium on my homeowners insurance policy?

The short answer is that filing and then canceling a claim should not affect your homeowners insurance premium in any way. However, keep a close eye when you get your renewal policy, and review the charges to ensure there aren’t any unexplained increases in your insurance rates.

What if my deductible is more than the cost of the claim?

If your home insurance policy deductible is more than the cost of the claim, you may want to skip the claims process and pay for the repair yourself. This way, there will not be another incident listed on your claims history, and you can avoid any possibility of associated rate increases.

How can I find out if my homeowners insurance claim is covered?

You should carefully examine your property insurance policy exclusions list to determine what your policy covers. If you are in doubt, contact your insurer. The insurance company likely has a call center or website where you can have any claims questions answered by a company representative.

Deciding Whether to Cancel a Claim

Suppose your home insurance claim is minimal (less than your deductible). In that case, it may be prudent for you not to file a claim to avoid having the incident on your CLUE report and avoiding any possible associated increase to your home insurance rates. However, you may not fully realize the cost of repairing the damage to your home. Therefore, it is a good idea to get cost estimates to repair the damage so you will know whether filing a homeowners insurance claim is worth it.

Remember to review your insurance coverage annually with your insurance agent to determine if you have adequate coverage limits to properly protect your home and your personal belongings.

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Updated August 5, 2021

Janet Hunt received her B.S. in Business Administration with the University of Phoenix. She has worked in the insurance industry for over 20 years. Janet likes to spend her spare time coming up with gourmet recipes and trying them out on her guests. So far, all have survived.