What’s not to like about the idea of “accident forgiveness”? It’s a promise that the first at-fault accident you have will not increase your premium. It sounds wonderful -- especially after a stressful event like a collision -- to know you won’t have to worry about your car insurance rates going up too.
But there are some details about accident forgiveness that you should know about before signing up for it.
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How Accident Forgiveness Works
Usually, when you’re involved in an accident and found to be at-fault for it (even if just partially), you’ll see an increase in rates when it comes time to renew. With accident forgiveness coverage in place, however, you can have one at-fault accident and skip the resulting increase. If you’ve been mostly collision-free during your driving career, this endorsement is your insurance company’s way of acknowledging that good drivers can have an occasional bad day behind the wheel.
You Still Have to Pay Your Insurance Deductible
Your collision claim may not result in a higher premium, but you’re not off the hook for paying the deductible. You’ll have to pay the deductible for your insurance claim for the repairs to your vehicle.
Accident Forgiveness Isn’t Free
Accident forgiveness is an optional endorsement, that if available, will usually add to the cost of your current auto insurance premium. Not every insurer offers accident forgiveness, and if they do, it generally costs $65 to $95 per year per vehicle. Some insurers, however, may offer it free of charge but typically only to longstanding customers.
Accident Forgiveness Isn’t Available to Everyone
Accident-prone drivers need not apply. Insurance companies are selective on who is eligible for accident forgiveness. As a rule-of-thumb, it is available only to drivers who have been collision-free for a minimum of six years.
The Accident May Be Forgiven but Is It Forgotten?
Your current insurer may have forgiven the collision and not hiked your rates, but the accident is not forgotten. It still goes on your insurance history.
The fact that the collision is still reported is what keeps your current insurance company confident they will keep you as a customer. Why? Because if you choose to shop your rate, you’ll likely find that other insurers’ premiums will reflect the reality that you have an at-fault collision on your record. 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 insurance providers for other reasons; this might come as a surprise.
Be Confident in What You’re Buying
Since accident forgiveness is often not free, it’s essential to understand what you’re buying. 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 you buy a car insurance policy to obtain accident forgiveness.