Auto Insurance Providers with Accident Forgiveness
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Now that you know how costly an accident can be for your insurance policy, you're probably ready to sign up for accident forgiveness coverage right away. While it can be tempting, it's always important to fully understand the ins and outs of any form of additional coverage you're considering. Here's a bit more information about what accident forgiveness does—and doesn't—doIf you have auto insurance and are in a car accident, the first thing you're likely to do is to breathe a sigh of relief. After all, knowing that your car insurance deductible will help you bear the cost of repairs can give you peace of mind in an otherwise emotionally charged situation.
But although the cost of the accident is covered, you may be upset once you see your auto insurance premiums rise after an at-fault accident.
Unless you have a lot of expendable money on your hands, you probably aren't too excited about the idea of a rate increase for your insurance premium. But help is available through a special program called the accident forgiveness program. These reward you as a safe driver with discounts and, in the event of an accident, give you a break.
Learn more about accident forgiveness and what insurers even offer this additional coverage before you start comparing insurance quotes.
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What happens if you're involved in a car accident without accident forgiveness coverage?
Before you understand how accident forgiveness works, it's important to have a clear picture of what happens if you're involved in an accident without accident forgiveness coverage. If you're driving your car and mistakenly run a stop sign, causing you to collide with another vehicle, you are considered at fault in the accident. Sometimes, insurance providers denote this sort of accident as a chargeable accident since you were the one who caused it.
Once you've been involved in an accident that you caused, your insurance premium is likely to increase because insurers will see you as a high-risk driver to insure. While how much your premium will increase depends on various factors (including age, type of car, and gender), that increase in premium cost can impact your policy for several years. As such, having an accident on your driving record can cost you thousands of dollars over the lifetime of your policy — even if, on the surface, it looks like a nominal increase year-to-year.
It's also worth noting that that accident goes on your driving record, and other insurance companies will see that if you try to switch to a different provider.
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What are the ins and outs of accident forgiveness?
So, now that you know how costly an accident can be for your insurance policy, you're probably ready to sign up for accident forgiveness coverage right away. While it can be tempting, it's always important to fully understand the ins and outs of any form of additional coverage you're considering when it comes to insurance. Here's a bit more information about what accident forgiveness does—and doesn't—do for you.
What accident forgiveness is
Generally speaking, accident forgiveness applies to only your first accident with a specific insurer. If you're in an at-fault accident — and it's your first — your insurance premium won't increase if you have accident forgiveness coverage.
Although this seems pretty straightforward, it's important to read up on your insurance provider's official policy since different insurers may have other criteria for what does and doesn't count under accident forgiveness. For example, some auto insurance companies will only forgive accidents under a specific value, while others may not even let young drivers take advantage of this type of coverage.
What accident forgiveness is not
Just because you have accident forgiveness and your insurance premium doesn't increase doesn't mean your insurer can wave a magic wand and make your driving record accident-free again. Think of accident forgiveness coverage as a get-out-of-jail-free card with your insurance company but not with the Bureau of Motor Vehicles.
Any time you're in an accident, it becomes a part of your driving history. This means that even if you've had your accident forgiven with one insurer, the accident may still affect your future insurance rate if you decide to switch insurance providers in a year or two.
Keep in mind, too, that accident forgiveness doesn't stack. As such, if you have another accident beyond your first, forgiven one, you can expect a rate increase. Even if enrolled in a safe driving discount program, it may be forgiven in one context but still impact your rates. This is why it's important to carefully review your coverage and policy to understand the product you're paying extra for entirely.
Eligibility
Different insurance companies may have other eligibility requirements for what kinds of accidents qualify for accident forgiveness. The same goes for accident forgiveness coverage since not all drivers may be eligible for this program. For example, most insurers require that you have an accident-free driving record for at least 3 to 5 years to qualify for accident forgiveness protection. A history of speeding tickets may also prevent you from being eligible for accident forgiveness coverage.
The best way to determine if you're eligible for accident forgiveness is to contact your auto insurance agent and discuss your driving record and policy options. Even if you don't qualify for accident forgiveness coverage, you may be eligible for a safe driving discount or other perks and discounts.
Auto insurance companies offering accident forgiveness coverage
While many auto insurers offer accident forgiveness coverage, not everyone does. Here are six of the major players when it comes to accident forgiveness.
Allstate
Allstate's Accident Forgiveness coverage is an add-on to your existing policy and begins the day you opt into the program. According to Allstate's website, "When you add Allstate's optional Accident Forgiveness coverage to your auto insurance policy, your rates won't go up after an accident — even if it was your fault." It's worth noting that this type of add-on coverage isn't available in every state, even if you already have Allstate insurance.
Allstate also offers stacking deductible rewards based on your driving record. For example, each year you're accident-free, you'll save $100 on your deductible. This perk maxes out at $500 and nets you an additional $100 off of your deductible just for opting in to this additional rewards program. Combined with the safe driving bonus (which gives you a discount every six months that you're accident-free), these discounts can add up.
Nationwide
Nationwide Accident Forgiveness is also an add-on to your existing auto insurance policy. You can add additional drivers to the same coverage; however, it can only be used once per policy. Like Allstate, Nationwide only offers Accident Forgiveness coverage in certain states, so you'll want to talk to your insurance agent to see if you're eligible.
Geico
Geico is a bit different from some other insurers in this list because they offer accident forgiveness as a purchasable add-on and a reward for reaching a certain threshold of miles driven as a safe driver. To earn Geico's accident forgiveness coverage for free, Geico will alert you when you've qualified as a "way of saying congratulations for reaching a milestone anniversary with GEICO and having maintained a clean driving record."
If you want to purchase coverage as an add-on, you'll need to do it when you first sign up or renew your policy with Geico. You'll need to meet driving record and experience requirements to qualify for premium accident forgiveness coverage.
Progressive
As a Progressive Loyalty Rewards member, you'll qualify for accident forgiveness coverage. Progressive breaks up its coverage into two categories: small and large accident forgiveness. Each is designed differently and will kick in in different scenarios.
Progressive's minor accident forgiveness is for a small $500 or less claim. After being a Progressive customer for five years with a history of no accidents, large accident forgiveness is something you qualify for if you remain accident-free for five consecutive years. Large accident forgiveness varies from state to state, so check with your auto insurance agent to see if you qualify for this coverage as a Loyalty Rewards member.
Liberty Mutual
Liberty Mutual's accident forgiveness coverage focuses on drivers with a clean driving record for five years. You don't need to have been insured by Liberty Mutual for five years to qualify if you have had no accidents or violations in the past five years.
Are you under 25 years old? Their website states, "Drivers 25 and under must total five consecutive clean years before their first accident is forgiven."
The Hartford
In terms of eligibility, the AARP® Auto Insurance Program from The Hartford policy is a bit different from others because all drivers on the policy must have a clean driving record to qualify. According to The Hartford's website, "If all of the drivers on your Hartford car insurance policy have a clean driving record for five consecutive years, you'll qualify for Accident Forgiveness."
Other than that caveat, Hartford's accident forgiveness coverage is quite similar to other insurers.
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Costs
Especially in auto insurance, costs vary widely from state to state and driver to driver. As such, it's a good idea to have a ballpark estimate of a few different average costs to determine whether or not you're getting a good deal as you compare insurance quotes.
The first piece of information you'll want to keep in mind when calculating whether or not accident forgiveness coverage is worth your money is the amount that your premium may increase in the event of a car accident. While this number can vary, too, on average, you can expect a 40% increase in your auto insurance premium following an accident. That could easily be an extra $500 or more a year that you're on the hook for following an accident—illustrating why accident forgiveness is a popular policy add-on for the budgetarily faint-of-heart.
The second piece of information you'll want to consider is whether or not you have other discounts that help lower your premium. If so, paying for accident forgiveness might make more financial sense since it's not likely to make your insurance policy too costly. On the other hand, if you don't have many discounts cushioning your costs, adding something like accident forgiveness might not be in your budget.
Pros and cons
Pros
- Can save you thousands. As stated above, some insurance agencies increase your premium by nearly 50% if you're in an at-fault accident. Paying a little bit annually to avoid such a price hike in the event of your first accident can save you thousands of dollars over the lifetime of your policy if you do have an accident.
- Some insurers automatically opt you in. Once you reach certain mileage thresholds, companies like Geico automatically sign you up for accident forgiveness free of charge. This can net you significant benefits without an added cost.
- Rewards good driving habits. Any discount program requiring drivers to speed less and avoid traffic violations and accidents to qualify is good for drivers everywhere by encouraging motorists to be a little more conscious behind the wheel. The simple fact that accident forgiveness requires drivers to have clean driving records for 3 to 5 years to qualify ultimately promotes good driving habits.
Cons
- Driving record requirements can make it challenging to qualify. Many insurance carriers require that you've been accident-free for as many as five years, so it can take a bit of time to qualify for accident forgiveness. This means you may not be eligible for it when you could use it most.
- Only useful if you have an accident. You could argue that all insurance is only valid if needed; however, accident forgiveness is an additional cost and not mandated by your state as necessary coverage. As such, it isn't likely to provide the utility and value of other add-ons.
- Not for everyone. Accident forgiveness can save money for high-risk drivers or those who often drive in busy cities. But when you consider that you're, in effect, prepaying coverage for an accident that may or may not happen in the future, the cost may not be as worthwhile.
The bottom line
Is accident forgiveness worth it? Yes! While accident forgiveness programs won't completely eradicate an accident from your driving record and are only applicable for your first accident, they have the potential to save you thousands of dollars over the lifetime of your auto insurance policy. Especially if you drive a lot for work or are in a busy city, having accident forgiveness can ensure that if you're at fault in an accident, the cost of your insurance premium won't get hiked up too much.
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Writer
Brent Ervin-Eickhoff is a Chicago-based writer, stage director, and filmmaker with a background in digital marketing and content creation. In addition to Joy Wallet, Brent has written for Complex, Volkswagen, HowlRound, Picture this Post, and Third Coast Review, among others. He currently serves as the Associate Director of Marketing for Content Creation at Court Theatre at the University of Chicago. Brent graduated from Ball State University with Academic Honors in Writing.
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