Accidents happen when you least expect. But that’s why they’re called accidents. If you get into an accident, and unfortunately you’re at-fault, it can be very expensive. Your policy premiums may increase. But this is where accident forgiveness comes in to help.
So, if you’re asking whether adding accident forgiveness is worth it, you’re not alone. It means you understand the related financial and record consequences of being involved in a car accident, especially if you’re at-fault.
We explore accident forgiveness insurance and whether it’s worth adding it to your car insurance policy. We also elaborate on its meaning in detail.
What Is Accident Forgiveness?
The real meaning of “accident forgiveness” is usually complicated and difficult to understand. Simply put, accident forgiveness is a way to save on your car insurance by avoiding an increase in your premiums. But the real meaning of accident insurance depends on your insurer.
Generally, if you’re involved in a car accident and considered at-fault, you’re likely to see a rise in your car insurance on the next renewal. The accident will also affect your driving record.
Insurers offer accident forgiveness on your policy to protect you from an increase in your car insurance premiums when you’re in an at-fault accident. This means that your car insurer will not increase your premiums on the next renewal despite the accident that’s now on your record.
How Does Accident Forgiveness Work?
There are different approaches to accident forgiveness coverage. Moreover, some insurance companies put across some demands or limits for you to qualify for accident forgiveness. For instance, for some insurers, you can only qualify for accident forgiveness after you’ve been their customer for a given period, such as three years. Other insurance companies may require that you have a clean driving record for a given period, then you can qualify for accident forgiveness coverage.
Generally, accident forgiveness is not automatic, and all insurance companies do not offer it. Some insurers offer accident forgiveness coverage included in your insurance policy. Other insurance companies sometimes offer it as an add-on (endorsement) or optional coverage, or both.
When you qualify for accident forgiveness, the accident will stay on your record, but your premiums won’t increase.
In addition, while accident insurance can help you save a lot of money, it does not cover every collision. Oftentimes, forgiveness is a one time deal. Once you’ve used your accident forgiveness, it’s unlikely your insurance company will forgive another.
Some insurance companies can extend the accident forgiveness to the other drivers listed on your policy.
What Are The Benefits Of Accident Forgiveness?
The benefits of any given thing including accident forgiveness are not static or automatic. But there are some universal benefits that people with accident forgiveness get:
- Protection from the increase in insurance rates
- Increased peace of mind while driving in a risk-prone neighborhood
- The advantage of keeping any available good driver discounts
Note: There can be other benefits depending on the specific driver. The benefits also vary depending on your insurance company.
Is Accident Forgiveness Worth It?
There is no straight answer to this question. The need for accident forgiveness coverage is circumstantial.
You should accept accident forgiveness if it’s included in your policy at no extra cost. But it is also important to get if the added peace of mind you’ll get outweighs the price, particularly if you have any high-risk drivers such as teenagers on your policy.
If accident forgiveness is only available for purchase, you need to carefully weigh its costs against the benefits you’ll get. Make a conscious case where purchasing accident forgiveness will be worth it.
For instance, here are situations when it might be worth it to purchase Accident Forgiveness:
- You have a teenage driver on your insurance policy
- You have a history of claims or at-fault accidents on your record
- You often drive more miles than an average driver
- You may experience a significant increase in your premium if you’re in an at-fault accident
- Your neighborhood experiences plenty of traffic accidents
You also need to consider the available alternatives as part of determining whether accident forgiveness is worth it. For instance, depending on your car insurance provider, an at-fault accident will raise your car insurance premiums by a given percentage, and this can remain for up to three years. In addition, it may also disqualify you from a good driver discount for between 5 and 10 years, costing you extra dollars.
Simply put, whether accident forgiveness is worth it or not depends on your risk levels, and the types of drivers included in your policy. Purchasing accident forgiveness coverage can help ease the pain of seeing your premiums rates increase after your teen’s first accident.
How Can I Get Accident Forgiveness On My Car Insurance Policy?
There are two ways you can get accident forgiveness as part of your car insurance policy:
- As a free add on to your policy
- As an endorsement
Free Accident Forgiveness
You earn free accident forgiveness depending on the qualifications that your insurance company lays down. For example, some insurers can offer it as a congratulation for reaching a given milestone anniversary or maintaining a clean driving record.
Accident Forgiveness As An Endorsement
You can add accident forgiveness as an optional or endorsement coverage. In this case, you will purchase the coverage if it is available in your state or from your insurer. Adding accident forgiveness to your policy may be beneficial to you if you have teen drivers on your policy.
You may want to ask your agent or insurance company about the type of accident forgiveness they have available or the one you qualify for.
What If You Don’t Qualify For Accident Forgiveness?
Accident forgiveness often comes with restrictions and limitations. You’re not likely to automatically qualify for accident coverage unless you meet the limits that your insurance company has put forth.
If you don’t qualify for accident forgiveness, you can consider the available alternatives to help you lower your premium rates. For instance, you can take advantage of good driver discounts if they are available on your policy. Most insurers offer good driver discounts if you take a defensive driving course.
Another potential alternative to accident forgiveness is “vanishing deductibles.” This is usually an optional feature on car insurance policies that insurers use to reward safe drivers. Insurers reduce the safe drivers’ deductible amounts as long as they continue with their safe driving record.
If you realize that you don’t qualify for accident forgiveness or don’t want to purchase it, check with your insurance provider to determine what alternatives are available.
Accident forgiveness is a simple way to avoid an increase in your insurance rates. Whether you qualify for it or not, it’s something you can consider having if you have a high-risk driver, such as a teen, on your policy. It can also be worth having accident forgiveness coverage if an at-fault accident can result in a significant increase in your car insurance premium. To determine if adding accident forgiveness coverage on your policy is worthwhile, ask your insurer or your agent about the related rate reductions or increases, then make an informed decision.