What is Accident Forgiveness Insurance?

Screech. Crunch. Uh-oh…

After the initial shock of a car accident, another shock hits you: the steep increase in the cost of auto insurance. If you have an at-fault accident that results in a claim, your insurance premiums may rise by 30% to 40% over the next three to five years. So you’ll be paying a lot more — unless you have accident forgiveness.

What is accident forgiveness? An option offered by many auto insurers, accident forgiveness means your insurance company will erase a single at-fault accident from your driving record when calculating your premiums, thus saving you money.

Sounds pretty sweet, right? Well, there are pros and cons to getting accident forgiveness insurance. We’ll tell you what you need to know.

How Accident Forgiveness Works

You’ve always been a good driver. You’ve never even scraped your bumper. But one afternoon, you forget to check your blind spot as you merge, and bam — you side-swipe the car next to you. Fortunately, no one gets hurt. But the damage to the other car is pretty bad, costing thousands to fix. Does that mean you’ll end up paying thousands more for your car insurance in the years to come?

Not if you have accident forgiveness car insurance. If you do, then your insurance company won’t count this incident on your driving record when they’re calculating your premiums at renewal. What a relief! There are a few things you should know, however:

  • If your accident involves a DUI or DWI, then your insurance company isn’t going to overlook the incident. Your rates will still go up, and probably by a lot.
  • Your rates may still increase, even with accident forgiveness, because you’ll lose any safe-driver or no-claims discounts you had.
  • Accident forgiveness applies only to your future insurance premiums, not to any other costs. If your own vehicle is damaged, for example, you’ll still have to pay the deductible for your collision insurance.
  • Accident forgiveness is like a “get out of jail free” card: Once you’ve used it, it’s gone. You may have to drive accident-free for years before you’re eligible to add accident forgiveness to your policy again.
  • The accident remains on your official driving record. If you switch insurers, they’ll still consider it when they’re setting your premium.

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Why is Accident Forgiveness Not Available in California?

If you live in California, you won’t be able to obtain a car insurance policy that includes accident forgiveness. That’s because, in 1988, voters approved Proposition 103, which says insurance companies can’t charge excessive rates and must also justify their rates. Because charging customers more for accident forgiveness insurance, when they haven’t even had an accident yet, was deemed “excessive,” California prohibits insurers from offering it.

There’s good news, though! The Consumer Federation of America found that Prop 103 has effectively kept insurance rates down, saving California drivers around $4.29 billion per year. If you feel like you’re paying too much, you can save big by comparing California car insurance rates.

How Much Does Accident Forgiveness Cost?

That depends on the insurer. Some insurance companies offer free accident forgiveness as a perk for long-time customers, while others add a surcharge to your premium. Regardless, in order to add accident forgiveness to your policy, you must have a clean driving record.

Insurance Companies With Accident Forgiveness

Here are 15 insurance companies that offer accident forgiveness (not available in all states):

  • Allstate makes accident forgiveness available as a policy add-on.
  • Amica Mutual Insurance offers a Good Driving Rewards program in which you earn Advantage Points for things like renewing your policy and completing a year of good driving. You can then use your points for accident forgiveness or to reduce your deductible.
  • Encompass Insurance offers Accident Forgiveness as an optional add-on product. Elite auto insurance plans include Enhanced Accident Forgiveness, which can forgive multiple at-fault accidents.
  • Liberty Mutual offers add-on accident forgiveness if you haven’t had an accident or violation for five years, whether you’ve been a customer of Liberty Mutual or a different insurer.
  • MAPFRE Insurance makes accident forgiveness available to less experienced drivers, new customers, and drivers without a perfect record.
  • GEICO offers customers two ways to get accident forgiveness: as a free reward or an optional upgrade. If you have multiple drivers on a policy, each eligible drivers may use accident forgiveness once.
  • Nationwide allows customers to purchase accident forgiveness.
  • Kemper Auto Insurance offers optional accident forgiveness, as well as Renewal Assurance.
  • Ohio Mutual grants accident forgiveness free to customers who have been with the company three or more years with no at-fault accidents in the household. Customers who haven’t hit the three-year mark may purchase Accident Forgiveness.
  • Plymouth Rock Assurance allows customers to purchase accident forgiveness insurance.
  • Safeco includes accident forgiveness in its Safety Rewards program for long-time customers.
  • Secura Insurance includes accident forgiveness on all MILE-STONE® Gold and Basic policies, at no cost, as long as you and the drivers in your household haven’t had an accident or a traffic violation for three years.
  • State Auto offers accident forgiveness to new policyholders if they’re free of accidents and violations for a period of 35 consecutive months.
  • Travelers offers a Responsible Driver Plan as an add-on purchase, which includes both accident forgiveness and minor violation forgiveness.

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