All About Accident Forgiveness

By Gary Hilson
orange road pylon with silver car that rear ended black car in the background

Even good drivers can get in an automobile accident, but it doesn’t necessarily have to raise your car insurance premium — that’s where adding accident forgiveness coverage to your policy can protect you from a first at-fault collision.

Accident forgiveness coverage is not included in a standard policy; it must be purchased and added to your policy.

In Ontario, the province’s Insurance Act prevents companies from increasing insurance premiums for minor at-fault collisions with less than $2,000 in damage and no injuries if there is no payout by the insurer. This provision is limited to one minor accident every three years, according to the Financial Services Regulatory Authority (formerly the Financial Services Commission of Ontario).

However, those limits can be exceeded depending on the level of fault allocated by the insurance provider following a collision. Insurers follow the provincial fault determination rules when investigating an accident. An allocation of more than 25% for a certain driver can lead to an increased premium for damages over $2,000. In some cases, both drivers involved in a collision may share fault. If you’re not at-fault for the accident, you won’t see a rate hike when renewing your policy with the same insurer.

There is a price to pay

Accident forgiveness coverage is recognition from your insurance provider that you’ve been collision-free for the last six years. But although your rates won’t automatically increase if you’ve paid for accident forgiveness, it does come at a cost. For example, if you are involved in an accident and have collision coverage, you may still have to pay a deductible upfront to get your vehicle fixed.

Not every insurer offers accident forgiveness, and those that do charge anywhere from $65 to $95 per vehicle per policy term. If you’re lucky, you may get it free of charge because you’re a long-standing customer with a clean driving record.

Insurance companies will also have some conditions on who can even apply for it, which can vary. Obviously, you must already have coverage with them, but they’ll also want you as the principal operator of the vehicle. Coverage is applied on a per vehicle basis, and can include cars, motorcycles, and motorhomes, and it still applies if you decide to get a different car.

However, it is not just your driving record that matters. Your insurance provider may require that every listed driver on the policy must be free of at-fault accidents for the preceding six years as well.

Forgiven but not forgotten

It’s important to remember that just because you are forgiven for your first at-fault accident by your insurance company, it doesn’t mean the accident is forgotten — it’s still added to your driving record. That means if you decide to switch providers after a collision, you may face a higher premium since the accident is on your record.

You also need to know that accident forgiveness only applies to your insurance policy; you’re not protected from being charged by the police or demerit points related to the accident.

Accident forgiveness can add another layer of protection to your car insurance policy and provide peace-of-mind before you make an honest mistake on the road.