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Accident Forgiveness 101

Accident forgiveness is a major selling point that most car insurance companies advertise these days. In some ways, it can be harder to find a company that doesn’t offer accident forgiveness than it can be to find an affordable rate on a policy that offers accident forgiveness. Offering this special option to customers is yet another way car insurance companies attempt to stay competitive and relevant in the market.

But what is accident forgiveness, exactly? Most people automatically assume it means that if they do get into an accident, it will not have any effect on their insurance rates whatsoever. But the truth is that accident forgiveness policies are almost as varied as insurance policies are themselves. Depending on the state you live in, the insurance company you are with, and even the zip code where you park your car at night, your accident forgiveness options may not be what you think they are.

Not All Accidents are “Forgivable”

For starters, most accident forgiveness rules apply to at-fault accidents – meaning that, according to the law, the accident was your fault. Again, depending on where you live and who carries your insurance, accident forgiveness may not apply to your situation if it was deemed a no-fault accident, or if it was the other driver’s fault. If you file a claim on either of those types of accidents, you may still see your insurance rates go up. For example, here’s what a middle-aged man might expect to pay if he files a claim on an expensive fender bender:

Auto Insurance Rate Hike Post-Claim Legend: Clean Driving Record After an Accident California Texas Pennsylvania Florida Illinois 15 30 45 60 75 90 105 120 135 150 165 180 195 210 225 $118 $163 $105 $127 $96 $134 $170 $231 $65 $105

 
It’s important to keep in mind when looking at the graph above that these estimates are very broad; the numbers above are only concerned with drivers who have and who have not had any accidents. It doesn’t take into account whether or not those drivers were already receiving a safe driver and/or a good driver discount.
 

Clean Driving Record Post-Accident Extra Expense (Over 5 years)
California $118 $163 $2,700
Texas $105 $127 $1,320
Pennsylvania $96 $134 $2,280
Florida 170 231 $3,660
Illinois $65 $105 $2,400

Filing a claim on any type of accident, regardless of fault, has a very real chance of stripping you of either or both of these very important discounts. And you could end up spending hundreds of dollars more per year on your auto insurance premiums based on both the increase from the accident, as well as the loss of those generous discounts.

Learning the Rules

As we said, the rules governing the accident forgiveness on your policy will vary not just from state-to-state, but from company to company as well. On top of that, there may be some other hoops that you need to jump through in order to make sure that you qualify (in the event that you get into an accident that is your fault). These hoops can include:

  • Being accident-free for a certain number of years
  • Being a loyal customer for a certain number of years
  • Having a certain number of years of driving experience before your accident
  • Some policies automatically come with accident forgiveness; others require you to purchase it
  • Some drivers won’t qualify for accident forgiveness if their claim is over a certain dollar amount
  • Some accident forgiveness claims may be denied if the accident results in death or Serious injury

And these are just some of the restrictions that may apply to the accident forgiveness policy that your particular insurance company offers. In order to protect yourself, your finances, and to stay safe on the road, it’s best to contact your insurance company directly and ask them about how their accident forgiveness policy works. After all, a well-informed driver is a safe driver.

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