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You have a lot of decisions to make when purchasing car insurance. One of these is whether to add accident forgiveness to your policy. Below, we'll look at how this works and help you decide if it makes sense for you.
Accident forgiveness is an option some car insurance companies offer that protects drivers against auto insurance rate hikes following an accident. Typically, it's only effective for a driver's first at-fault accident on the auto insurance policy.
Most insurers that offer accident forgiveness coverage do so as an optional endorsement. Interested drivers can choose to add it to their policies if they qualify. It will raise their premiums slightly, but it could pay off if they find themselves in an at-fault accident.
Should a driver with accident forgiveness cause an accident, the insurance company won't automatically raise their rates as they would for a driver without accident forgiveness.
But that doesn't mean drivers with accident forgiveness get off scot-free. The accident still shows up on the driver's record, and they could lose safe driver discounts they previously qualified for. This could cause premiums to go up anyway. Plus, accident forgiveness only applies to the current policy term. When the driver renews their policy, they could face increased rates due to the accident on their driving record.
If you're interested in car insurance with accident forgiveness, here are some companies to check out.
Geico accident forgiveness is available to drivers 21 and older with at least five years of safe driving. It's available as a paid upgrade to all qualifying drivers, but those who have been with Geico for an extended period of time may receive it for free.
Allstate accident forgiveness is one of many options available to customers interested in customizing their car insurance policies and earning rewards for safe driving. It's available as an optional add-on to interested customers.
Progressive is unique in that it offers two accident forgiveness options. There's Small Accident Forgiveness, which applies to claims of $500 or less, and Large Accident Forgiveness for claims of $500 or more. Interested drivers can purchase Small Accident Forgiveness, but only Progressive customers of five or more years who have been accident free for at least three years qualify for free Large Accident Forgiveness.
USAA, a one of the best car insurance options for military members, veterans, and their families, offers accident forgiveness to policyholders who remain accident free for five years.
Drivers without accidents or violations within the last five years are eligible to purchase accident forgiveness coverage from Liberty Mutual. The company also promises not to increase these drivers' rates at renewal due to their first at-fault accident.
Nationwide accident forgiveness is available to drivers in select states. It's only good for the first at-fault accident per policy, not per driver.
Accident forgiveness could potentially help drivers avoid a premium hike after an accident, but this isn't always the case.
How much a driver's insurance goes up after an accident depends on several factors. These include the severity of the accident and the car insurance average cost where the driver lives. It's possible to see more than a 20% jump in premiums after an at-fault accident.
Accidents typically remain on a driving record for three to five years, depending on the state the driver lives in. Accidents continue to affect rates during this time, though their effect gets smaller the longer it's been since the accident.
With most insurers, getting accident forgiveness coverage is pretty simple. All a driver has to do is add it to their policy and pay their premiums every month. For insurers that offer accident forgiveness as a loyalty benefit, drivers don't need to do anything. The insurer will automatically apply the benefit to the policy once the driver has been with the company long enough.
Of course, all of this assumes a driver qualifies in the first place. Each insurer sets its own standards about who qualifies for the benefit. Some common qualification requirements include:
If you're unsure about the qualification requirements for accident forgiveness, reach out to the insurer to find out.
Just because a driver doesn't qualify for accident forgiveness with one insurer doesn't mean they won't with another. If you're serious about adding this coverage option to your policy, shop around to see if you can get it through a different insurer.
Drivers who can't may have no choice but to wait until the accidents on their driving records fall off. Then, they can try applying for accident forgiveness again. But that doesn't mean there isn't anything these drivers can do to lower their rates in the meantime. See the tips below.
The following tips are useful to all drivers trying to keep their car insurance rates as low as possible:
Check out our hand-picked list of the best car insurance companies. Our top picks are packed with valuable perks, such as low rates, bundled discounts, and best-in-class service.
It depends on the insurer. Accident forgiveness is usually an optional coverage drivers must pay extra for, but some offer it to certain drivers for free as a loyalty benefit.
Each insurer has its own qualification requirements. They typically involve being accident free for a certain number of years prior to applying for accident forgiveness. Certain companies also require drivers to be of a certain age or with the insurer for a certain amount of time before qualifying for accident forgiveness.
Drivers can potentially reduce their insurance rates following an accident by shopping around, looking for discounts, and raising their car insurance deductibles.
It's up to each driver to decide whether to report a minor accident to insurance. It could raise insurance rates, so some drivers prefer to pay for it out of pocket to avoid the higher premiums.
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