There are many different types of insurance claims against many different types of insurance, and this article cannot address what happens when you withdraw an insurance claim for all types of insurance claims, policies, and facts. But will, in general, discuss what happens when you withdraw an insurance claim and what you should know.
First, we’ll look at what happens before you can withdraw an insurance claim and who can withdraw an insurance claim.
How Is an Insurance Claim Filed?
As soon as you call your insurance company or agent to report a potential claim, the insurance claim is made, and a claim number will be generated.
TIP: If you don’t get a claim number when you call, make sure to follow up within a day to get the claim number. We advise people to obtain an insurance claim number because it proves the claim was filed.
Who Can File an Insurance Claim?
- An insured can file an insurance claim.
- Anyone who suffered a loss because of an insured can also file an insurance claim against the insured’s policy without the permission of the insured.
When Can You Withdraw an Insurance Claim?
The most common time that an insured wants to withdraw an insurance claim is very soon after the claim is reported. Soon after a claim is reported, the insurance company will probably not have done much to investigate the claim, and no money will have been paid.
If the insurance company has investigated the claim, it will likely still be on your record and can affect your premium even if you withdraw your claim, and no money was paid to you. However, it is possible that it will not affect your premium if no money was paid to you.
If the insurance company has paid money to you, it may be possible to withdraw the insurance claim, but you would have to pay the money back, and your premium would likely go up anyway.
How Can I Find Out if an Insurance Claim Will Affect My Premium?
You will never be able to determine in advance whether an insurance claim will affect your premium because only the insurance company underwriters can answer that question and different insurance companies use different guidelines to determine risk and premium.
The only way to find out if an insurance claim will affect your premium is when you get the first premium invoice after you file your claim or after the claim has been closed.
Filing an insurance claim will not necessarily increase your premium. Even if your insurance company pays money for a claim, your premium will not necessarily increase.
My father fell in my house and was injured when he tripped on a toolbox left on the step in my garage. I called a friend of mine who is a personal injury lawyer for trip and fall accidents and told him to call my father and sue me. My insurance company settled and paid $60,000. But my insurance company never increased my premium, and I still use the same insurance company.
Who Can Withdraw an Insurance Claim?
Only the person who filed an insurance claim can withdraw an insurance claim.
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Can You Withdraw an Insurance Claim?
If you filed an insurance claim for an accident or incident in which you are the only person who could benefit from the claim, and no one else has filed a claim, you could withdraw an insurance claim.
Examples of When You Can Withdraw an Insurance Claim
- You reported to your insurance company that your roof leaked but then found out it was minor damage that you did not want to claim. This happened in my house. I had a leak from ice damming, which damaged the walls in my living room and family room, but I found someone to repair the damage for only $600, so I did not want to make an insurance claim.
- Someone hit your new car in a parking lot, and you called your insurance company to report someone hit your car. After you went to your body shop, you found that it would only cost you $600 to repair, and you don’t want to make a claim for $600.
I don’t report auto damage claims on my car unless it’s $3,000 or more or if anyone may have been injured. You should always report an accident if anyone were in any car involved in the accident. If you came out of a store to find that someone hit your parked car, you do not need to file a claim if you don’t think the cost of repair is enough to justify making a claim.
When Can’t You Withdraw an Insurance Claim?
- If anyone else filed the claim, you cannot withdraw the insurance claim.
- Some insurance claims are regulated by New York State law, such as a No-fault insurance claim. New York State law states that No-fault insurance is primary. Therefore, you cannot withdraw a No-fault insurance claim because you want to submit medical bills to your health insurance or Medicare instead.
- If you fraudulently file an insurance claim, you have already committed a crime, even if you are able to withdraw it. Even if you withdraw the claim, the insurance company’s SIU (Special Investigative Unit) may still investigate and report it to the police.
Note: If someone else was injured or suffered property damage, that person, company, or government agency could file an insurance claim against your policy without your permission, and you cannot withdraw the insurance claim.
For instance, if you had a car accident and the other driver files a claim against your insurance for either personal injury or property damage, you cannot withdraw the insurance claim even if you believe it was the fault of the other driver, that the other driver wasn’t injured, and there was no damage to the other driver’s car.
What is Insurance Fraud?
The National Association of Insurance Commissioners provides the following definition of insurance fraud, “Insurance fraud occurs when an insurance company, agent, adjuster or consumer commits a deliberate deception in order to obtain an illegitimate gain. It can occur during the process of buying, using, selling, or underwriting insurance.” It should be noted that the term “using” includes filing an insurance claim.
Should I Withdraw an Insurance Claim?
Probably not, once it has already been filed. There are substantial benefits that you receive when you file an insurance claim. Once an insurance claim is filed, it’s already on your record, so if the insurance claim would have increased your premium, it will likely increase anyway, even if you withdraw your insurance claim.
What Benefits Do You Get When an Insurance Claim is Filed?
Some of the valuable benefits you will get when you file an insurance claim are the following:
- Free claims handling by a professional insurance claims representative who is trained to spot fraudulent claims and minimize your financial exposure.
- Free legal representation by an insurance claim defense lawyer.
- Indemnification – If a claimant is entitled to be paid, your insurance company will pay the claim, so you don’t have to.
- If you’re the claimant, you will likely receive more money than a premium increase will cost you. Additionally, it should be noted that your premium may not increase just because you filed a claim.
- Usually, the money you receive from an insurance claim is not taxable.
What Are the Reasons I Would Want to Withdraw an Insurance Claim?
- To prevent a premium increase.
- You are concerned that you may be committing insurance fraud.
What Happens When You Withdraw an Insurance Claim
- Your insurance company will not send you a check to reimburse you for your loss.
- Your accident or incident will stay on your insurance record.
- It’s possible that your insurance company may increase your insurance premium anyway.
- You will not receive free claims handling
- You will not receive free legal representation
- You will not receive
How Do You Withdraw an Insurance Claim?
You can cancel or withdraw an insurance claim by calling your insurance broker or insurance company.
NOTE: One of the many advantages of buying insurance from an insurance broker is that you may be able to cancel an insurance claim without it affecting your premium if it’s still early and you call your insurance broker to cancel.
You may be able to withdraw an insurance claim even if you already received the money if you return the check or the money to your insurance company, but you will have to find out from your insurance company if you will be allowed to do that.
How Do You Find Out What Insurance Claims Are On Your Record?
Once you file an insurance claim, it goes on your record. But it doesn’t just go on your record at your insurance company. It will go on your insurance record that is available to all insurance companies on an insurance claims report that is similar to a credit report. See how to find out what claims are on your insurance claims report.
Can You Withdraw an Insurance Claim Against Someone Else’s Insurance?
Yes. There are three reasons you may want to withdraw an insurance claim you filed against someone else’s insurance policy:
- Your family member is complaining that their insurance will go up (but a family member’s premium might not go up when you file a personal injury claim)
- You didn’t suffer the loss you thought you did.
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