What Is Accident Forgiveness and How Does it Work?

There are a lot of auto insurance companies out there that offer car insurance discount rates and gimmicky features that could almost be seen as pie in the sky promises. One of the most successful of those campaigns which has proven to be extremely popular among prospective auto insurance policy customers is accident forgiveness. But what exactly does that mean?

What Does Accident Forgiveness Mean?
Accident forgiveness doesn't sound like something that you’d have to beg from your insurer, especially if the accident in question was your fault and resulted in extensive damage. But alas, it’s become one of the major selling points for an awful lot of car insurers. So what exactly does it mean? In essence, the insurance company is telling you that if you’re involved in an accident, your premium rates won’t skyrocket in quite the same way that you could expect them to if there were no such thing as accident forgiveness. As everyone knows, a spotless driving record is the key that lets you save on car insurance year after year, and an accident can wreak havoc on your ability to rely on a consistent car insurance discount.

Different Definitions
The only problem with accident forgiveness is that it doesn’t always mean the same thing to every insurer. Depending on who you’re talking to, it could mean something similar, but the outcome could be drastically different. For example in some cases, the car insurance company will only offer forgiveness if it’s clearly proven that you weren’t at fault for the accident. In other cases, you’re forgiven even if you were at fault. Yet another variable depends on your past driving record. If you caused the accident in question but have a record of good driving, you’ll be forgiven—but if you have a few marks on your driving record, that forgiveness might not be extended to you. Before you go blindly signing up for an auto insurance policy to take advantage of accident forgiveness, be clear about what the insurer’s definition is and determine if you really would benefit from it.

What’s the Price of Accident Forgiveness?
In the end, accident forgiveness costs extra. Did you expect anything different? After all, even auto insurers have to make money. They do this by carefully calculating the risk that you and other drivers present them, offering you car insurance discounts when it’s practical to do so, and charging extra when there’s proof to suggest they could be opening themselves up to financial loss. Makes sense, right? All that said, a policy that includes accident forgiveness will cost you more out of pocket. If you’re concerned about saving as much money as possible, you’ll have to decide if it’s in your best interest to opt out of it.

Other Considerations
One thing to bear in mind is that if you have accident forgiveness and you’ve had to exercise that policy, you may only be entitled to one accident within a given timeframe. In other words, if you have a second accident too soon following your first, your rates will go up. Yet another consideration is the fact that accident forgiveness won’t follow you if you switch insurers. If you had an accident last year and your current insurer’s forgiven you, if you move to another provider that accident follows you and may be held against you by the new company.