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Accident Forgiveness Insurance – What Is It? And Do You Need It?

Accidents happen, even to the best drivers.  If you’re unfortunate enough to be the one at fault, it can be costly for years to come.  When it comes time to renew your insurance, your premium is all but guaranteed to go up with an at-fault accident claim on your record.  

If you want to avoid this scenario, you may be considering the “accident forgiveness coverage” that some insurance companies offer.  But what does accident forgiveness coverage entail?  Is it a good idea?  And do you need it?  Let’s find out.  

How At-Fault Accidents Affect Your Insurance Premiums

As mentioned above, if you are considered at-fault for an accident or you receive a moving violation, it raises a red flag for insurers and you may end up having your premiums raised when it’s time to renew, or (depending on the severity of the situation) be denied coverage altogether.  Because of this, it stands to reason that accident forgiveness is a great option to avoid a rate hike… but wait just a moment before you go signing up for it, because it’s not quite that simple.  

How Accident Forgiveness Coverage Works

When you sign up for accident forgiveness coverage, it means your insurer won’t raise your premiums exclusively due to an at-fault claim on your record.  Some even offer it as a free perk for drivers with a clean record, but others will likely charge you extra for it.  Either way, you’ll need to have a clean driving record for 3-5 years before you qualify for the option in the first place.  

Here’s how it usually works:  If you have a long-term clean driving record, your insurance company will agree to ignore the first at-fault accident you have when it comes to raising your premium.   

But that’s the catch– because you’re paying for an add-on, how much are you willing to pay to make sure your premiums don’t raise due to a mistake you haven’t made, and may never make?  It’s important to do the math and see how the costs add up over the long-run. 

So Is It Worth It?

It’s also important to note that accident forgiveness only applies to your first accident.  So if you have another one that year, you’ll end up paying for it with a hike in your premiums as normal… meaning the extra cost might be for nothing.  Terms and conditions for such policies are also different depending on state laws in your area.  

It’s important to weigh the pros and cons of such an add on with your insurer, and a qualified agent.  If it comes as a free policy perk, such an add-on may very well be a no-brainer. If, however, it ends up costing extra, it’s important to do the math right.  Fill out the form and get in touch with an expert to see if this coverage is right for you.