What Is Accident Forgiveness Car Insurance?
Insurance companies offer a variety of accident forgiveness programs designed to reassure safe drivers that, on the rare occasion that they do cause an accident, they won’t be penalized for it with increased premiums. Accident forgiveness can benefit insurers and customers alike.
Insurance companies benefit by retaining loyal customers who are the least likely to cause an accident. Drivers benefit from the reassurance that, if you have that rare lapse in judgment, you might be able to avoid the curse of higher rates.
You can find details on the accident forgiveness programs offered by major insurers below. Please note that not all insurers offer some form of accident forgiveness.
The programs listed below fall into three categories:
- Paid Insurance Product – Some companies, such as Nationwide, offer accident forgiveness as an add-on option. Others incorporate the feature into a larger package, such as Allstate’s “Your Choice Auto” gold and platinum packages.
- Customer Loyalty Service – If you are a long-term safe driver, your insurance company may recognize your loyalty and driving history with no-cost accident forgiveness.
- Hybrid Product and Service – Some companies offer a paid accident forgiveness product to new and less safe customers and free accident forgiveness to long-term customers with a record of safe driving.
|Company||How To Get It||Details|
|Available as part of Allstate’s Gold or Platinum “Your Choice Auto” Packages. About $100 - $300 per year||
|Initial cost of approximately $24 per year. Free to qualifying safe drivers after three years||
|Paid Product – costs vary by driver and state||
|Free to customers who qualify as a safe driver (violation- and accident-free for five years).||
|Accident forgiveness for one accident after nine years of safe driving.||
|Accident forgiveness included in Responsible Driver and Premium Responsible Driver plans. Rates vary by driver and state.||
Policies vary by state. For terms to apply, you must qualify and have accident forgiveness included on your policy. Please check with your agent or insurance company for your policy’s terms.
There are several ways insurance companies look at accidents and how they affect your rates. Depending on your insurance company and policy, accident forgiveness may alleviate many of these issues – but usually not all of them.
- Accident Reporting: Insurance companies always report accidents and claims to insurance reporting agencies such as the LexisNexis CLUE database, whether or not they affect your rates.
- Accident Surcharges: Insurance companies may bill an accident surcharge during your current policy period while leaving your basic rate the same.
- Discounts: With a good driving record you may qualify for discounts; accidents may remove these discounts.
- Renewal: When it comes time to renew your policy, an insurance company may calculate new rates based on the past term. Claims and traffic violations may cause them to drop you as a customer or shift you from a standard policy, regardless of accident forgiveness.
- Fault: Many insurers look to see if you’ve been in an accident at all, whether or not you are at fault. In the case of accident forgiveness, the definition of an accident is often if a claim of more than a certain amount (about $750) is filed due to an accident where you are found to be at least partially at fault.
- Claim Cost: Though many insurers refer to fault with accident forgiveness, fault isn’t a clear term in many states. Depending on your state, the size of a claim may be more important than fault. Check with your agent and terms.
Depending on your company, policy, and state, there are still some twists and turns to navigate when it comes to accident forgiveness.
In general, accident forgiveness by itself isn’t a good reason to switch companies if you’ve already done your research and like your rates and coverage. The one exception is if you’ve recently had an accident. If you don’t already have accident forgiveness, your current company is likely to increase your rate. However, to win your business, another insurer may be willing to forgive your most recent accident. If you can’t find one that will forgive the accident for free, you might find one that will accept you into an inexpensive accident forgiveness program.
If you do switch companies and like the idea of accident forgiveness, look for policies that reward safe driving with accident forgiveness as a loyalty service or offer the product as an inexpensive add on.
That said, it is not always wise to pay extra for accident forgiveness. Paying for this feature can be compared to insuring your insurance, or betting against yourself. In most cases, if you are a safe driver who rarely files claims, you will rarely recoup the extra cost you pay for accident forgiveness.
Before paying extra for accident forgiveness, ask your insurance company about how a claim would affect your rates without this feature:
- Under what circumstances will an accident or claim increase my premiums?
- When will an accident or claim trigger added surcharges?
- When will an accident or claim remove any discounts I had qualified for?
- How long will it take for an accident to no longer affect my rates with or without accident forgiveness?
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