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This perk keeps your premium low if you get in an at-fault accident after a long safety streak.
Accident forgiveness is an insurance benefit that provides you with the assurance that your monthly premium won’t increase after your first at-fault accident in a long time. Insurance rate hikes after an accident can be huge depending on the amount of damage paid out on the claim. Even a small fender bender can affect your premiums, leaving you with higher payments for up to five years after an accident. Drivers may want to look for this perk or add-on coverage to hedge their bet against the costly aftereffects of a wreck.
How does accident forgiveness work?
Accident forgiveness is a car insurance add-on or perk that protects your monthly premium from increasing after your first at-fault accident. You’ll either pay to add it to your policy or earn it after keeping your record clean for a specific amount of time like three to five years.
Accident forgiveness kicks in if you get in an at-fault accident after a long accident-free streak. Typically your insurance premium would increase because you’re deemed a high-risk driver. But if you have accident forgiveness, you won’t see a cost increase for the first accident.
However, if you cause an accident because of risky driving like driving drunk or at high speeds, accident forgiveness won’t prevent your insurer from dropping you at renewal time. If you’re not at fault, your insurer shouldn’t raise your rates or use your accident forgiveness benefit. The exception is that your insurer may drop your policy if you file multiple claims within a few years.
Types of accident forgiveness with car insurance
You can find a variety of insurance add-ons or perks that save you money if you have a one-off accident after driving safely for a long time.
- Small accident forgiveness. Some companies apply this perk only to accidents with low-cost repairs like a fender bender. Some companies also put a dollar limit on repair costs like $500 or $1,000. So if a crash costs more than that amount, it won’t be forgiven even if you have coverage.
- Upgraded accident forgiveness. While many companies offer free accident forgiveness to reward safe driving, some let you buy it as an upgrade to your policy. Once you use the coverage for an accident, your insurer will take it off your policy when the policy renews.
- First-ticket forgiveness. Protects you against a premium increase after your first moving violation or ticket. Similar to car accidents, tickets or moving violations typically result in a rate hike.
- Disappearing deductible. An optional feature that reduces your deductible by a specified amount each year you’re insured without an accident. For instance, Nationwide’s vanishing deductible decreases your deductible by $100 for each accident-free year.
What if there are several drivers on the policy?
For policies with several drivers, the benefit applies to one accident across all drivers on your policy. When a covered driver takes advantage of accident forgiveness, it’s typically no longer available to the other drivers on the policy until you earn it back.
Is accident forgiveness worth it?
Accident forgiveness can save you money in the long run if it’s a free benefit, but it could be an unnecessary cost if you’re paying a monthly fee for it. The value of paying for accident forgiveness depends on how likely you are to get in a car accident, how much the upgrade costs and whether you keep high car insurance deductibles.
Let’s say that you pay $1,200 per year for car insurance, and you get in an accident. Factoring in the potential 44% premium increase after filing a claim, your premium could increase by $528 per year. In this case, paying $72 for the year to add accident forgiveness would save you hundreds of dollars.
How to qualify for accident forgiveness
The easiest way to qualify for accident forgiveness is to maintain a clean driving record. Most insurers require at least three years of crash-free driving before you’re eligible for the benefit. Take these steps to help you qualify:
- Drive defensively. Even if you’re a safe driver, assume everyone else on the road isn’t. Stay watchful of other drivers, especially at intersections and when passing or turning.
- Avoid making small claims. If you can pay for damage after an accident with no other drivers involved, your rates won’t increase if you forgo making a claim. Then, you’ll be closer to qualifying for accident forgiveness.
To get this benefit on your current policy, either log in to your online account or call your insurer to ask if the benefit is available. For new policies, the company either will add this perk automatically as you enter your driving history, or you can choose accident forgiveness as an add-on to your policy quote.
Note that if you change companies, you may reset the clock on the time required to qualify for this perk — insurers use this perk to build customer loyalty.
Which car insurance companies offer accident forgiveness?
Availability will depend on your state.
|Farmers||Free policy upgrade after three years of no accidents|
|Geico||Free policy upgrade after five years of no accidents|
|Liberty Mutual||Available for purchase after five years of no accidents|
|Nationwide||Available for purchase|
|Progressive||Free policy upgrade for customers of at least five years with no accidents over three years|
What if I don’t qualify?
If you don’t qualify for accident forgiveness, another way to save is to take a defensive driving course that could land you a safety course discount with your insurance company. The discount can range from 5% to 10% and often stays on your policy for three years.
Otherwise, you can look into pay-as-you-go policies. Usage-based insurance is a great choice for drivers with a short commute and less-than-clean driving record. The money you save on low mileage can counteract the higher premium for high-risk drivers.
How long an accident stays on your driving record depends on your state and the severity of the crash. On average, a typical at-fault accident will be on your record for three years. If you focus on three years of driving with no claims, you can then apply for accident forgiveness.
Why is accident forgiveness not available in California?
Not all states allow insurers to offer accident forgiveness to their customers. When signing up for a policy, ask your provider if your state allows this option.
Accident forgiveness isn’t available in every state, and it’s difficult to get in California.
Compare car insurance with accident forgiveness
To protect yourself against a potential premium increase, accident forgiveness can be a valuable benefit to consider. Shop around and compare insurers to get the best overall value when considering your car insurance options.
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