What is Accident Forgiveness?

Accident forgiveness is a type of automobile insurance policy you can buy that will “forgive” your first accident and not surcharge your policy premium.   Many insurance companies are advertising this type of automobile insurance policy as a great way to not get caught in the financial pinch of having your automobile insurance premiums increase over your first accident, or your first accident in a long time. The idea is that you are not charged additional premium, or a surcharge, for the accident.  The drawback is the fact that the insurance policy cost up to 50% more than a policy without the feature known as accident forgiveness.

So do you choose to pay more now, and for the next five years?  Or do you take your chances, save money on automobile insurance premiums now and gamble to see if you have an accident?

Some of us are very safe drivers, never had an accident in all our driving years.  Maybe you would like the luxury to know if that first accident happens that you are not going to have to pay higher automobile insurance premiums for it.

Things to know about accident forgiveness:

  • This policy will not keep tickets, accidents or claims off your driving record.
  • The policy is not transferable, so if you choose to switch automobile insurance companies, you will have to start over with a new policy, and new premiums.
  • The premiums for accident forgiveness are higher than the lowest pricing tiers insurance companies offer.
  • If you often shop for your insurance, or if you have tickets and/or accidents on your driving record, this is not the best policy for you.

Keep in mind most insurance companies now surcharge you for all claims, whether they are your fault or not and whether they are non-collision claims such as vandalism and hail.  Accident forgiveness will keep your first claim off your policy, but if there is a 2nd claim or a 3rd claim, your policy will be surcharged.   And since the accident forgiveness policy cost quite a bit more than insurance policies without accident forgiveness, those surcharges will be significant.  Or the insurance company may have to take you off the accident forgiveness policy all together, and place you on another type of policy at which point the first accident is not forgiven, and now you are being charged for 2 or 3 accidents.   General, one accident surcharge is not so bad, add another and you will see a much bigger increase, make it 3 accidents, and your policy will be surcharged tremendously.

If you still have more questions, go to AgentInsure.com and search for a licensed independent agent in your area that will answer your questions.