Accidents happen. In fact, estimates show that the average person will have a car accident that requires them to file an auto insurance claim once every 17.9 years. For many people, it’s much more frequent than that.
This means that even if you’re careful, there’s a good chance that at some point your auto insurance will go up following a claim. That is, unless you have an accident forgiveness auto insurance policy.
What is accident forgiveness, and how can it help you? Here’s what you need to know.
Accident Forgiveness Vehicle Insurance: The Basics
First things first, what is accident forgiveness?
It’s an additional coverage on your auto insurance policy. When you have accident forgiveness coverage, your auto insurance premiums won’t go up due to your first accident. Some insurance companies automatically offer accident forgiveness while others require you to purchase it as an endorsement on your basic policy.
In many cases, even if you have to pay a premium for this coverage, it’s worth the money. Your first at-fault accident can cause your car insurance rates to increase by an average of 44%!
Even worse, depending on your insurance carrier, you could end up paying higher premiums for as long as three years.
How to Qualify
While each auto insurance company is different, many require you to have five years of accident-free driving before you’re eligible for this coverage.
If you’ve had multiple accidents in the past few years or an excessive number of moving violations or speeding tickets on your record, there’s a good chance that you won’t be able to get accident forgiveness coverage, even if your insurance company offers it.
Some companies also do not allow accident forgiveness coverage for households that have divers under the age of 21 with fewer than three years of driving experience.
On the other hand, most insurance companies will give you rewards for keeping your driving record clean. If you’re able to keep your record clean for longer than the minimum five years, you might qualify for even more premium discounts.
Accident Types and the Impact on Insurance Premiums
It’s important to note that this typically applies to a “chargeable accident.” An accident many be considered “chargeable” you’re deemed to be more than 50% at fault, there’s damage to another person’s property, and/or someone suffers from a bodily injury or death. This could be anything from a small fender-bender to a major crash.
Generally, certain types of accidents won’t cause an increase in your auto insurance policy. This includes:
- Being hit by another vehicle while your car is parked
- Being rear-ended if you weren’t’ issued a moving violation in connection with the accident
- Being struck by a hit-and-run driver
- An accident that happens due to contact with an animal
- An accident caused by defective tires
- An accident that creates physical damage limited to and caused by falling objects, flying gravel, or missiles
Also, if the other driver was convicted of a moving violation but you weren’t then the incident should not lead to an insurance policy increase.
Important Rules to Understand
Most accident forgiveness policies only allow one accident per policy, not per driver within the designated time period. So if there are multiple drivers on your policy, there’s a greater chance that you’ll use up this benefit fairly quickly.
Also, while having accident forgiveness coverage can help you save money on your insurance premiums, it’s important to note that the accident will still remain on your driving record. This means that if you decide to switch insurance companies, the accident could impact the premiums you’ll pay on your new policy.
In some states, like California, accident forgiveness isn’t allowed. Unfortunately, if you live in one of these states, you won’t be able to take advantage of this type of coverage.
Is Accident Forgiveness Coverage Right for You?
If you know that you qualify for accident insurance, you’ll want to think about the pros and cons before you make your decision. For example, consider the cost of the coverage and make sure it doesn’t exceed the potential premium increase.
For example, if accident forgiveness costs you $150 a year and you’re accident-free for 10 years, you’ll end up spending $1,500 for coverage you didn’t really need.
However, if you have a high-risk driver on your policy, then this money could be well worth it. Before you add this coverage, consider the driving skills of everyone on your policy.
Also consider driving frequency. The less you drive, the less likely you are to get into an accident, which may mean that the extra cost for accident forgiveness coverage might not be worth it.
Alternative Coverage Options
If accident forgiveness sounds good but you’re not sure you’ll qualify, you may have other options. For example, some companies offer a disappearing deductible policy. With these policies, each year you’re accident-free, your deductible will go down. This will save you significantly when you do have an accident claim.
Other policies offer discounts for students with good grades, for military service men and women, and others. Even if you do qualify for accident forgiveness coverage, you might decide that you don’t want to pay extra money to add it to your insurance policy. There might also be other discounts or programs that can save you more money.
It’s a great idea to reach out to a qualified agent who can help you shop for insurance coverage. This way, you’ll find the policy that’s best for your specific needs.
Shop for Auto Insurance Today
Whether you think an accident forgiveness car insurance policy is right for you or you want to explore other options, Amistad Insurance can help! We’re your one-stop local insurance agency with years of industry experience.
Contact us today and we’ll help you find the perfect insurance policy for your needs.