How Auto Insurance Accident Forgiveness Work

Car insurance accident forgiveness is a provision offered by many insurers to mitigate the impact of the first at-fault accident on premiums. While maintaining a clean driving record for several years can help keep rates stable, a single at-fault accident can cause up to 42% premium increase. To address this issue, insurers often provide accident forgiveness as an optional add-on or a reward for qualifying policyholders.

Once policyholders qualify for and get accident forgiveness, the insurer promises to “ignore” the next at-fault claim, though it is recorded in their history. It’s important to note that this provision does not erase the accident; rather, it prevents the insurer from penalizing the policyholder with premium increases for a single at-fault accident following a long period without accidents. You won’t have accident forgiveness from the second accident onwards and they will affect your premiums.

It’s crucial to be selective when choosing an insurer because leaving the current provider (who won’t increase the premium for the first accident thanks to accident forgiveness coverage) after an accident can be challenging. Other insurers will see the accident in driving records and take it into account when providing quotes, resulting in higher premiums for at least three years. Therefore, policyholders may be effectively tied to their current insurer for that period unless they find an incredibly considerate and competitive carrier elsewhere.

Although some automobile insurers offer accident forgiveness as a complimentary benefit to good and qualifying policyholders, other insurers may charge additional fees for this provision. Customers should weigh the costs and benefits of accident forgiveness when deciding on an insurance provider.

Auto insurance accident forgiveness provisions, qualifications, and terms vary among insurers, and availability may differ from state to state. For example, Policyholders who maintain a long-standing relationship with Progressive (around five years) become eligible for their loyalty program, which includes accident forgiveness. However, the company offers free Small Accident Forgiveness, which shows leniency towards small incidents with minimal costs, typically capped at a predetermined amount, currently $500. Progressive customers are automatically granted Small Accident Forgiveness from day one of their Progressive policy.

Other insurers, such as GEICO and Liberty Mutual, offer accident forgiveness as a chargeable add-on. However, their forgiveness coverage extends to all drivers listed on the policy, regardless of their experience and age, providing a valuable benefit. It is important to note that accident forgiveness usually applies to one accident per policy, not per driver. Certain insurers may require policyholders to choose an upgraded auto insurance policy to qualify for accident forgiveness, making it potentially more difficult and expensive to obtain.

When comparing insurance quotes, it is advisable for motorists to check if vehicle insurance accident forgiveness is included and consider its impact on their coverage. Qualification criteria, coverage for all drivers on the policy (especially high-risk ones like teenagers), and whether the addition is free or entails an extra cost should be carefully considered.

Accident forgiveness is implemented differently by each insurer. Some companies, like Liberty Mutual, allow the transfer of accident forgiveness benefits, meaning a clean driving record with a previous insurer can count towards qualifying for accident forgiveness with a new insurer. While some insurers may offer accident forgiveness after three years, the typical requirement is around five years of clean driving history, with no accidents and often no traffic violations too.

Car insurance with accident forgiveness coverage provides peace of mind, assuring policyholders that their premiums will not increase due to a single collision after a long clean driving history. It serves as a valuable addition to an insurance policy if the costs are reasonable. Motorists may look for a company that offers the most favorable accident forgiveness benefits at the lowest cost.