Up to you but the cost of insurance will go up for the next 5 years if you make a claim so, over that period, I'd say it's more than likely not worth making a claim and just cancelling it.
Am I allowed to cancel it though rather than make a claim if it’s been reported as nicked? Can’t find anything online about this, but it seems well within my rights?
Making a claim isn’t really an option as you’ve mentioned it’s not worth the pay out.
Up to you but the cost of insurance will go up for the next 5 years if you make a claim so, over that period, I'd say it's more than likely not worth making a claim and just cancelling it.