In a study from 2019, it was estimated that almost 6.6 million passenger cars were involved in some form of a road accident. This large and scary number is enough to compel you to get auto insurance. Car accidents are very common, and what’s more common in all of them is they are expensive. There’s no denying that car insurance rates are very high, and add that to the sky-high gas prices, working from home will easily help you save thousands of dollars each year. 

But did you know that the already high insurance rates can go higher if you are involved in any type of car accident? (which causes damage to others’ cars or property and you are at fault). Some estimates show that the average annual price for insurance goes as high as 47% after an accident. But you cannot blame insurance companies for this price hike.

Insurance companies are risk management companies where that decide the price of a policy based on the total risk. One accident and the risk factor goes up, and to offset that, the companies increase the price. You can find the cheapest car insurance companies and yet get a higher insurance quote after an accident. This is where Accident Forgiveness coverage comes into play, and here’s everything you need to know about it. 

What is Accident Forgiveness and Why is it Important?

Accident Forgiveness coverage is an add-on policy that you can club with your existing insurance coverage. It is not the same as collision or comprehensive insurance. As the name suggests, accident forgiveness coverage “forgives” one accident per policy. This “forgiveness” comes in the form of waiving the surcharge that is added after the accident. 

So if you hit another car or a light pole for example, instead of your insurance premium going up by some hefty percentage, you’ll get the same prices as before. The company will let you off the hook, but only once. Don’t assume that accident forgiveness is a pass to drive recklessly. 

Accident forgiveness coverage can be a blessing for people who drive well and have a great driving record but due to unfortunate circumstances get involved in an accident. This price hike is very difficult to get rid of. Accident Forgiveness coverage can be summarized in the best way with this; It is insurance for your vehicle insurance. 

How to Get Accident Forgiveness Coverage

Just like forgiveness, accident forgiveness can either be achieved or bought. Most popular insurance companies offer this add-on. These companies include: 

• Geico
• Allstate
• Erie
• Progressive
• Nationwide
• Farmers
• Travelers
• USAA

Each company has its policy of either rewarding or selling accident forgiveness. Geico is one such company that sells accident forgiveness for a small annual payment. Farmers and Allstate also offer it at affordable prices.

If you want to get accident forgiveness for free, you’ll have to maintain a clean driving record, and even no claims for a few years (three years in most cases). But this reward can alter from one company to another and even from one driver to another. Do note that this is a policy-specific coverage and not a driver-specific one, so you can transfer it to other drivers as well. 

Important Things to Know 

Before you get overwhelmed with joy and run to get yourself accident forgiveness coverage, there are a few things you should know. Firstly, accident forgiveness is not offered by all insurance companies. So for the insurer, it might be present but with a different name, or it might not be present at all. 

Secondly, not all states permit this accident forgiveness coverage. California is one such state. Why is it not allowed? Well, no one wants people to drive carelessly without the fear of repercussions. But do not assume that this coverage will take away all the repercussions. 

Even though you have accident forgiveness coverage, in the case of an accident, the accident is still on the records. The accident is “forgiven” not “forgotten”. You will not pay the surcharge, but that accident will be recorded on the CLUE report. So when you decide to switch auto insurance providers, you’ll be charged more because of the accident. So is it worth it? 

Is Accident Forgiveness Worth it? 

Considering the average price of accident forgiveness coverage, it is worth getting one, if you have a great driving record. Even though you drive very carefully, there are times when accidents are bound to happen. While the definition of chargeable damage is vague and changes from one company to another, accident forgiveness can come very useful and save a lot of money than what it charges.

When it’s Your Fault

Depending on the state that you are in, or your auto insurer, an accident could be considered chargeable based on different factors. For example, if in an accident, your fault was more than 50%, then the accident becomes chargeable and you’ll get a price hike. Another way of deciding this is the cost to fix the damage, which also varies from place to place. In some states, if the cost of repairs touches $1,000, then it is considered chargeable damage. In some other states, $500 would suffice. It could also be worth getting in touch with a car accident lawyer to give yourself extra protection. 

In conclusion, paying just a little bit for accident forgiveness coverage makes sense, if you have a great driving record. But, before getting any coverage, make sure to know everything about it directly from your insurer.