How Does Auto Accident Forgiveness Work?

Accident forgiveness helps keep your rates low after a car accident. Learn here if you qualify and if it's worth it.

totaled car on side of road

Accident forgiveness is a benefit that some auto insurance companies offer as either a free perk or as a policy add-on. It prevents an at-fault accident from resulting in an auto insurance rate increase. Accident forgiveness can be great to have if you or someone else on your policy is a high-risk driver. But in some cases, paying for accident forgiveness can end up costing you more in the long run. This article will cover:

What is accident forgiveness?

Accident forgiveness is an auto insurance policy add-on or endorsement that prevents your car insurance premium from increasing after your first at-fault collision. It usually covers every driver on your auto insurance policy. However, the forgiveness on an at-fault claim is often only for the first at-fault accident in the policy, not the first accident for each driver on the policy.

It should be noted that accident forgiveness only affects at-fault accidents on your driving record. This means that a collision accident claim would benefit from accident coverage, but a comprehensive coverage claim would not. Comprehensive claims generally do not involve other cars.

It should be pointed out that because of California state law, accident forgiveness is not offered by any auto insurers there.

Do I qualify for accident forgiveness?

Auto insurers usually only provide accident forgiveness for select policyholders, such as:

  • Drivers with accident-free records: If you've kept your auto insurance record free from collisions, usually for five or more years, you should be eligible for accident forgiveness.
  • Long-time auto insurance policyholders: Insurers tend to reward loyalty. Depending on how long you've been with your auto insurance company, you may be able to get accident forgiveness even if your accident record isn't spotless.
  • New customers: Some insurers offer accident forgiveness to new policyholders just signing on as a reward for choosing them.

Is it worth buying accident forgiveness coverage?

Deciding whether you should get accident forgiveness comes down to need and return on investment, the two sometimes overlapping. Consider if the risk of you or anyone else on your auto insurance policy being in an at-fault accident is worth the extra cost. You'll also want to know if the reasons for buying accident forgiveness are actually covered by your auto insurance.

Accident forgiveness may add an average of 3% to 5% to your yearly premium. This may be a significant increase for you, but you'll want to see which will cost you more: the cost of adding accident forgiveness to your coverage, or the cost increase to your auto insurance premium after an accident.

The following table shows the average auto insurance premium increase after your first accident. The rate increase on your auto insurance policy usually lasts anywhere from three to five years. Look at your provider's average increase and what that would add up to dollar-wise over three to five years. Then compare it to the cost of accident forgiveness.

Auto insurance company Premium increase after an accident
Allstate 38%
Progressive 38%
Farmers 32%
Liberty Mutual 23%
GEICO 22%
American Family 18%
Travelers 16%
State Farm 12%
Safeco 12%
Nationwide 10%

It's also important to keep in mind that accident forgiveness affects your auto insurance rate, not your claim record. While it prevents your current auto insurance premium from increasing after an at-fault accident with your current provider, other providers will still be able to see any accidents you've had and may increase your rate accordingly if you switch insurance companies.

This is a good time to shop around and compare auto insurance quotes. Whether you decide to go with accident forgiveness or just take a chance, finding a new provider that can get you good coverage with a lower rate increase after an accident works in your favor.

On the plus side, if your auto insurance policy covers a teen driver in your household, then accident forgiveness can be an excellent benefit. Teen drivers are seen as high-risk by auto insurers due to inexperience and charge a high rate to cover them from the start.

If you have one or more teens on your policy, accident forgiveness can save you from having to spend even more money on auto coverage. You will, however, want to pay close attention to how many years your auto insurance provider wants your household to go without an at-fault accident. Given that the average qualifying time span without an accident is three to five years, many teens may not benefit from it.

Auto insurers that offer accident forgiveness

Auto insurance companies tend to have different criteria for offering accident forgiveness. Some offer it as part of your standard coverage, while others require you to purchase it as an add-on with conditions. The following are overviews of major auto insurers and their accident forgiveness offerings.

Allstate

Allstate offers accident forgiveness through purchase of its YourChoice auto insurance coverage plan. There are two tiers to the YourChoice plan: Gold and Platinum. Allstate's Gold plan allows you to get accident forgiveness coverage after you go three years without an at-fault collision with them. Platinum plan gives you accident forgiveness as soon as you sign on.

Furthermore, Allstate has a discount that reduces your auto insurance premium every six months you go without an accident.

Farmers

Farmers will forgive one at-fault accident every three years. While it may have some of the higher average premiums, the recurring accident forgiveness can be an advantage if you have high-risk drivers in your household

GEICO

GEICO has two options for accident forgiveness available to its auto insurance policyholders: the company will either give you accident forgiveness after a set amount of time passes under its coverage without an at-fault accident (check with GEICO for time limits), or accident forgiveness may be purchased at the beginning of your policy term or its renewal. Along with California, GEICO's accident forgiveness is not available in Connecticut or Massachusetts.

The Hartford

The Hartford offers accident forgiveness as part of its Advantage Plus program if you maintain an accident-free driving record for five years. The Hartford is the top auto insurer endorsed by AARP, making it an excellent choice for senior drivers.

Liberty Mutual

Accident forgiveness through Liberty Mutual is offered as an add-on you can purchase if you've gone three years without an accident on your driving record. Furthermore, the insurer offers you a discount if you go five years without an accident.

Nationwide

You can purchase accident forgiveness with Nationwide as an add-on feature. Nationwide only offers accident forgiveness in select states, so check with the company to see if your area qualifies. As an added perk, Nationwide will give you an additional 10% safe driver discount if you go five years without making an auto insurance claim.

Progressive

Through Progressive's loyalty program, available in qualifying states, the company will forgive auto accidents under $500 in covered damages. After five years with Progressive, it will forgive your first covered accident over $500 damages.

State Farm

State Farm provides a program that will forgive your first accident if you've been with the company for at least nine years without an at-fault accident.

USAA

With USAA membership, your first at-fault accident after five years being accident-free with the company will not result in an auto insurance rate increase. It's important to point out that USAA only covers currently serving and veteran military members, as well as qualifying family members.

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