What Is Accident Forgiveness Coverage?

What Is Accident Forgiveness Coverage?

What Is Accident Forgiveness Coverage?, If you cause the accident, it can be expensive for years to come because car insurance rates will usually increase at renewal time following an at-fault accident.

Our analysis found:

  • The national average auto insurance rate increase for an at-fault accident with property damage is 38%.
  • The average rate hike is 40% if you cause an accident with injuries.

To help you avoid this increase, some insurers offer accident forgiveness coverage—but if you’re a very good driver, adding this option may not be worth it.

What Is Accident Forgiveness Insurance?

If you’re in an accident and you are found to be at fault, there’s a good chance your auto insurance premiums will rise. Your driving record is a big factor in determining car insurance costs, so causing an accident usually means a rate increase when you renew the policy or shop for a new one.

Accident forgiveness coverage helps policyholders keep their rates down. Some insurance companies add this coverage automatically, while others offer it as an add-on coverage option (that you pay for) or a combination of both.

Here are some key things to consider about accident forgiveness:

  • Accident forgiveness isn’t offered by every insurance company. Also, some states such as California don’t allow accident forgiveness.
  • There are limitations for accident forgiveness. Usually, accident forgiveness only applies to one accident per policy, not per driver on the policy. For example, Farmers Insurance forgives one at-fault accident for every three years you drive without an accident.
  • Your accident will stay on your driving record, even if it’s “forgiven” by your insurance company. Since other insurance companies can see your driving record, your accident can impact your future rates if you decide to switch insurers, too.

What Is a “Chargeable Accident”?

A “chargeable” accident is one in which the insurance company has determined you were at fault in some way. Your accident may be chargeable if you’re more than 50% at fault. Chargeable accidents also include:

  • Damage you cause to another person’s property.
  • A crash that causes injury or death.

A chargeable accident can be as simple as a fender bender or as serious as totaling someone’s car. Usually, when an insurance company decides an accident is chargeable, it adds a surcharge to your premium. A surcharge is an increase in the cost of your policy.

Some states also define a chargeable accident in terms of a dollar amount, such as:

  • In Massachusetts, you may see an insurance surcharge if the accident involves a claim payment of over $1,000 for damage to someone else’s property, a collision or bodily injury to others (for accidents where the operator is more than 50% at fault and driving a private passenger vehicle).
  • In Minnesota, an accident is chargeable when the insurer pays more than $500 under bodily injury liability, collision or property damage liability coverage.
  • In New York, you can receive a surcharge if you’re found at fault for an auto accident involving losses of property or injury over $2,000.

Unfortunately, a chargeable accident can follow you around for a while. Some insurance companies gradually decrease your surcharge every year you go without an accident. In many states, your surcharge can be lowered gradually over three years until it disappears completely as long as you’re accident-free.

It’s important to note that not every type of accident will make your insurance go up. Here are some examples of accidents that typically won’t result in a surcharge:

  • Your car was parked and hit by another vehicle.
  • Your car was struck in the rear and you were not convicted of a moving traffic violation in connection with the accident.
  • You were struck by a hit-and-run driver.
  • The other driver was convicted of the moving violation but you were not.
  • The accident involved contact with an animal.
  • The accident resulted in physical damage, limited to and caused by flying gravel, missiles or falling objects.
  • Defective tires caused the accident.
  • The accident occurred while in pursuit of official duties as a law enforcement officer or emergency vehicles.

Accident Forgiveness Insurance Rules

Even if your car insurance company offers accident forgiveness coverage, not everyone qualifies and some accidents won’t be eligible for forgiveness. Here are a few examples of common requirements and exclusions you should be aware of:

Clean driving record. Typically, insurers require you  to have a clean driving record to qualify for accident forgiveness. For example, to qualify for the Farmers Flex from Farmers Insurance, all drivers on the policy over age 25 must have no chargeable at‐fault accidents, no more than one minor or speeding citation and no DUIs. Drivers under age 25 must have no traffic violations or citations of any kind.

One accident per policy. Accident forgiveness is not an unlimited pass. Usually it allows forgiveness for only one at-fault accident per policy, even if you have multiple drivers on the policy.

Is Accident Forgiveness Insurance Worth it?

Accident forgiveness may be worth it, especially if you have high-risk drivers in your household.

Our analysis of the national average annual cost of accident forgiveness from some large companies finds it’s usually pretty affordable.

The yearly cost for accident forgiveness varies from $15 to $60, based on our analysis.

We compared the annual cost of accident forgiveness to the price of coverage without it and how much more you’d pay with an accident on your record. After crunching the numbers, we found accident forgiveness is worth the extra cost.

For example:

  • You’d pay an amount equal to eight years of accident forgiveness with USAA car insurance to equal the $472 USAA rate hike from an accident. And remember that increase would continue for three to five years normally, so paying $60 a year to combat a hike is worth it.
  • You’d pay what is equal to 61 years of accident forgiveness costs with Nationwide car insurance to equal the over $900 rate increase for one at-fault accident with injury. Thus, accident forgiveness with Nationwide is quite the bargain.


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