If you cause an accident, it can be costly for years because car insurance rates typically rise at renewal time following an at-fault incident. As per the analysis
- The national average auto insurance rate increase for an at-fault accident with property damage is 38%.
- The average rate hike is 40% if you cause an accident with injuries.
To help you avoid these increases, some insurance companies offer accident forgiveness coverage. If you are a very good driver, adding this option might not be worth it.
What Is Accident Forgiveness Insurance?
If you’re in an accident and found to be at fault, your auto insurance premiums are likely to increase. Your driving record plays a significant role in determining car insurance costs, so causing an accident typically leads to a rate hike when you renew your policy or shop for a new one.
Accident forgiveness coverage helps policyholders maintain lower rates. Some insurance companies include this coverage automatically, while others offer it as an add-on option i.e. which you pay for or a combination of both.
Here are some key points to consider about accident forgiveness:
- Not all insurance companies offer accident forgiveness, and some states, such as California, don’t allow it.
- Accident forgiveness usually applies to one accident per policy, not per driver on the policy. For example, Farmers Insurance forgives one at-fault accident for every three years you drive without an accident.
- Your accident will remain on your driving record even if it’s “forgiven” by your insurance company. Other insurers can see your driving record, so your accident may impact future rates if you switch insurance company.
What Is a “Chargeable Accident”?
A “chargeable” accident is one where the insurance company determines you were at fault to some degree. Typically, an accident is chargeable if you are more than 50% at fault. Chargeable accidents include:
- Damage you cause to another person’s property.
- A crash that results in injury or death.
A chargeable accident can range from a minor fender bender to a severe collision that totals another vehicle. When an insurance company deems an accident chargeable, it usually applies a surcharge to your premium, which is an increase in your policy cost.
Some states define a chargeable accident by a specific dollar amount. For instance:
- Massachusetts: An insurance surcharge may apply if the accident involves a claim payment over $1,000 for damage to someone else’s property, a collision, or bodily injury (if the driver is more than 50% at fault and driving a private passenger vehicle).
- Minnesota: An accident is chargeable when the insurer pays more than $500 under bodily injury liability, collision, or property damage liability coverage.
- New York: You can receive a surcharge if you’re at fault for an accident involving property damage or injury costs exceeding $2,000.
A chargeable accident can impact your premiums for a while. Some insurance companies gradually reduce the surcharge each year you remain accident-free, with many states allowing the surcharge to be completely removed after three years if you have no further accidents.
However, not all accidents will increase your car insurance rates. Examples of non-chargeable accidents typically include:
- Your parked car was hit by another vehicle.
- Your car was rear-ended and you were not convicted of a moving violation related to the accident.
- You were struck due to hit-and-run driver.
- The other driver was convicted of the moving violation, and you were not.
- The accident involved any contact with an animal.
- The accident resulted in physical damage caused by flying gravel, missiles, or falling objects.
- Defective tires caused the accident.
- The accident occurred while you were performing official duties as a law enforcement officer or driving an emergency vehicle.
Accident Forgiveness Insurance Rules
Even if your car insurance company offers accident forgiveness coverage, not everyone qualifies, and some accidents won’t be eligible for forgiveness. Here are a few common requirements and exclusions to be aware of:
Clean driving record:
Car Insurance companies typically require a clean driving record to qualify for accident forgiveness. For instance, to be eligible for Farmers Flex from Farmers Insurance, all drivers on the policy over age 25 must have no chargeable at-fault accidents, no more than one minor or speeding citation, and no DUIs. Drivers under age 25 must have no traffic violations or citations of any kind.
One accident per policy:
Accident forgiveness is not an unlimited pass. It usually covers only one at-fault accident per policy, regardless of the number of drivers on the policy.
Is Accident Forgiveness Insurance Worth It?
Accident forgiveness can be worth it, especially if you have high-risk drivers in your household. Based on the analysis of the national average annual cost of accident forgiveness from several large companies finds it’s typically quite affordable.
The annual cost of accident forgiveness to the price of coverage without it and the additional costs incurred after an accident. After crunching the numbers, we found that accident forgiveness is often worth the extra cost.
For example:
- With USAA car insurance, you’d pay an amount equal to eight years of accident forgiveness to cover the $472 rate hike from an accident. Since this increase would normally continue for three to five years, paying $60 a year for accident forgiveness is worth it.
- With Nationwide car insurance, you’d pay what is equal to 61 years of accident forgiveness costs to cover the over $900 rate increase for one at-fault accident with injury. Thus, accident forgiveness with Nationwide is quite a bargain.
Cost of Accident Forgiveness Coverage vs. Rate Increase
Rates for accident forgiveness vary by company and state, so get a quote to see if adding it to your policy makes financial sense.
|
Company |
Annual cost of accident forgiveness |
Average annual rate increase after accident with injuries |
Years of accident forgiveness to equal increase of rates |
|
Auto-Owners |
$21 |
$574 |
27 |
|
Farmers |
$52 |
$925 |
18 |
|
Nationwide |
$15 |
$918 |
61 |
|
Travelers |
$21 |
$565 |
27 |
|
USAA |
$60 |
$472 |
8 |
Insurance Companies That Offer Accident Forgiveness
Each insurance company has different features and requirements for their accident forgiveness coverage. Here are some examples:
Allstate Offers optional accident forgiveness coverage. Eligibility typically requires being accident-free for three to five years.
American Family Provides accident forgiveness for purchase or as an earned benefit. You can buy it at the start or renewal of your policy if household drivers haven't had at-fault accidents or violations in the past 12 months and no more than one at-fault accident in the last three years. You can earn it by having no claims for five years and no major violations.
Auto-Owners Offers accident forgiveness for purchase if drivers on your policy have been without at-fault claims or major violations for the preceding 36 months.
Erie Provides "first accident forgiveness" after you’ve been a customer for at least three years.
Farmers Forgives one at-fault accident for every three years you drive without an accident.
Geico Allows policyholders to receive accident forgiveness for free by maintaining a clean driving record or purchasing it as an upgrade. Free coverage requires being accident-free for five years. Drivers under 21 might not be eligible.
Liberty Mutual Offers accident forgiveness as additional coverage. To qualify, drivers must have no accidents or traffic violations within the last five years. Drivers under 25 must have a completely clean driving record for five years.
Nationwide Provides accident forgiveness as an add-on. It forgives your first at-fault accident or a minor violation that would normally incur a surcharge.
Progressive Offers "small accident forgiveness" (rates don’t increase for claims under $500) and "large accident forgiveness" for free through the Progressive Loyalty Rewards program. For large accident forgiveness, you must be a customer for at least five years and accident-free for three years. You can also buy accident forgiveness that forgives one accident per policy period.
The Hartford Provides accident forgiveness if all drivers on your policy have been free of accidents and moving violations for the last five years.
Travelers Offers a Responsible Driver Plan that includes accident forgiveness and minor violation forgiveness. This plan forgives one minor violation and one accident every three years.
USAA Provides optional accident forgiveness for free after five years if household drivers have been free of at-fault accidents.
Alternatives to Accident Forgiveness for Good Drivers
For some, accident forgiveness coverage may not be an option. For example, a Farmers policy analysis shows that you can't qualify if there are any drivers in the household under age 21 with less than three years of driving experience.
Good Driver Discounts
If you don’t qualify for accident forgiveness, you might still be eligible for other car insurance discounts for safe drivers. For instance, Geico offers a Five-Year Accident-Free Good Driver discount, providing up to 22% off on most coverage types for drivers with a clean five-year driving record.
Vanishing Deductibles
Another potential savings option is a vanishing deductible, which is an optional feature that reduces your deductible amount for claims as long as you maintain continuous safe driving. For example, with Travelers’ Premier Responsible Driver Plan, drivers receive a Decreasing Deductible that provides a $50 credit toward their deductibles for every six months they are accident-free, up to $500.
If you don’t qualify for accident forgiveness coverage or prefer not to pay extra for it, check with your insurer about other discounts and coverage options available.
Accident Forgiveness Insurance Frequently Asked Questions
Do you pay extra for accident forgiveness?
Typically, you have to pay extra for accident forgiveness. However, some insurance companies offer it as a free perk to qualified drivers with good records. For example, Geico provides free accident forgiveness to drivers who have been accident-free for five years.
Can I buy accident forgiveness after an accident?
You cannot buy forgiveness for an accident that has already occurred. If you recently caused an accident, you won’t be eligible to purchase accident forgiveness. If your rates increase after an accident, compare car insurance quotes to see if another company offers more affordable rates.
How long does an accident stay on your record?
The duration an accident stays on your driving record varies by state, but a surcharge typically affects your car insurance rates for three to five years. For instance, states like New Jersey, New York, and Texas allow insurers to surcharge only for accidents in the previous three years. Other states, like Massachusetts, permit surcharges for accidents that occurred in the past five years.
Who is eligible for Accident Forgiveness Insurance?
Eligibility for Accident Forgiveness varies by insurer. Generally, it is offered to policyholders who have a clean driving record for a certain number of years. Some car insurance companies may require you to be a customer for a specific period before you qualify, while others offer it as an optional add-on or as a benefit for long-term customers.
How can I get Accident Forgiveness Insurance?
To get Accident Forgiveness Insurance, you should:
1. Check with your insurer: See if they offer Accident Forgiveness and understand their specific terms and conditions.
2. Maintain a good driving record: Many insurers require a clean driving history for a certain period.
3. Consider purchasing it as an add-on: If it’s not automatically included in your policy, you may be able to add it for an additional fee.
Does Accident Forgiveness Insurance cover all accidents?
Accident Forgiveness typically covers only at-fault accidents. It does not cover other incidents such as hit-and-runs, natural disasters, or damage caused by uninsured drivers. Always check the specifics with your insurer.
How many accidents can be forgiven?
Most insurers allow only one forgiven accident per policy period or within a certain number of years. After that, any additional accidents may result in increased insurance premiums. The exact number and conditions can vary, so check with your insurance provider.
Is Accident Forgiveness worth it?
Accident Forgiveness can be worth it if you value the peace of mind, obtaining a best car insurance with accident forgiveness that comes with knowing your first at-fault accident won't increase your premiums. It’s especially beneficial if you have a good driving record and want to protect yourself from potential future rate hikes.
How much does Accident Forgiveness Insurance cost?
The cost of Accident Forgiveness varies by insurer. Some car insurance companies offer it for free to loyal customers or as part of a standard policy, while others may charge an additional premium. The cost can also depend on factors like your driving record and the level of coverage you have.
Can I lose Accident Forgiveness once I have it?
Yes, you can lose Accident Forgiveness if you violate the terms of the policy, such as having multiple accidents, major traffic violations, or if you fail to renew your policy. Each car insurance company has different criteria for maintaining this benefit.
Which companies offer Accident Forgiveness Insurance?
Many major insurance companies offer Accident Forgiveness, including:
- Allstate
- GEICO
- Progressive
- State Farm
- Liberty Mutual
Each company has different eligibility criteria and terms, so it’s important to compare policies.
How do I know if Accident Forgiveness is included in my policy?
Review your policy documents from various car insurance company to get cheaper car insurance and contact your insurance agent to confirm if Accident Forgiveness is included in your policy. You can also inquire about adding it if it's not already part of your coverage.
What should I consider before getting Accident Forgiveness Insurance?
Before getting Accident Forgiveness, consider:
Cost vs. benefit: Weigh the additional cost against the potential savings on premiums after an accident.
Your driving record: If you have a clean record and are confident in your driving skills, it may be more beneficial.
Policy terms: Understand the specific terms and conditions, including any limitations and exclusions.
By understanding these aspects, you can make an informed decision about whether Accident Forgiveness Insurance is right for you.