PRESS RELEASE: October 12, 2011 – Drivers are being lured into new policies with the promise of a feature known as “accident forgiveness”. The promise is that the first accident a driver has while covered with the policy will not result in an increase in premiums. It sounds wonderful, but InsuranceHotline.com warns drivers to be sure to read the fine print. There are limitations to accident forgiveness every driver should know about before counting on it to avoid a rate increase. And there are other important features on auto insurance every driver should be aware of as well.

Accident forgiveness, the latest trend in automobile insurance, certainly draws drivers in. Good drivers who are involved in their first accident can be very frustrated by the increase in rates that results. After paying on insurance premiums for so long, seeing an increase for one accident leaves drivers feeling cheated. Insurance companies introduced accident forgiveness to combat this – but does it fully protect from rate increases? Know before buying!

How Accident Forgiveness Works.
Accident forgiveness is a very simple concept. Normally when a driver is involved in accident and is determine to have been at fault, they are responsible and therefore have an increase in rates. This is because having had one accident, they are considered a higher risk for the insurance company, and also to make up some of what the insurance company has had to pay out on the claim.

With accident forgiveness, a driver can have one at-fault accident – their first – and not see a rate increase as a result and keep their lower rate. This is the insurance company’s way of acknowledging that even good drivers can make the occasional mistake. It also acknowledges that previously paid premiums can count towards covering the claim payment. Offering accident forgiveness makes the insured feel valued and less likely to jump ship for another company, so it benefits the company as well. But there are some details about the feature that every driver should know.

Accident Forgiveness Has Limitations.
If a driver chooses to shop their rate and move to a new insurance company, forgiveness for an accident will not come along. Thus the new insurance company can and likely will charge for the accident on the new policy. This fact is what keeps the current insurance company confident that they will keep customers. Of course, there is nothing wrong with staying with the insurance company that is not charging for an accident, but should a driver want or need to change for other reasons, this might come as a surprise.

It is commonly believed that the accident will not result in an increase no matter what the situation, but this is not true. Every insurance company has limits on how they choose to apply the feature and in what situation it applies and does not apply. It is important to read all the fine print and get all the details before buying a policy to obtain accident forgiveness.

In some cases a driver must be with the same company for a certain amount of time before the accident forgiveness goes into effect. There may also be limitations on how long the driver must maintain a good driving record before accident forgiveness will apply. Every insurance company makes their own rules in relation to accident forgiveness and it is up to the consumer to find out what they are.

“Accident forgiveness can be very beneficial to drivers,” says Tammy Ezer of InsuranceHotline.com, “but many are surprised by limitations because they weren’t informed. Every driver should know the limitations of his or her policy.”

Other Features to Consider.
While accident forgiveness has been getting plenty of attention as the latest feature to be added to insurance policies, there is another feature drivers of new cars should think about. Waiver of depreciation is a feature many drivers are not aware of until it is too late, but it is a feature that is very useful when needed. Simply put, it allows drivers of new cars to receive a settlement equal to the purchase price of the new car rather than to the depreciated value.

Many drivers are shocked to discover they will not be able to replace their new car with another new car when it is a total write-off. With waiver of depreciation, a car purchased in the last year, sometimes two years, will be replaced with a brand new car. When choosing important features while shopping for auto insurance, do not leave this one out!