I heard that some companies cancel people's auto insurance if they have just one claim. Is this true?

Actually, it's very unlikely that any type of insurance would be canceled after you file a single claim. However, filing a claim could increase your premium on certain types of insurance.

For example, your auto insurance premium will almost certainly increase after an accident, especially if you're at fault. The reason for this is simple: statistical evidence indicates that people who have had accidents in the past are more likely to have accidents again in the future. This means the insurance company could see another claim from you someday, so there is a logical reason to charge you more for insurance coverage. Some states don't allow insurers to raise rates after a single not-at-fault accident, however.

The big question is how much your premium will increase. This is more difficult to anticipate, because insurance companies can use different formulas to calculate rate increases. In most cases, your auto insurance policy will not be canceled unless you have a certain number of at-fault accidents within a given period (e.g., two or three in one year).