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Accident Forgiveness

A hodgepodge of marketing campaigns over the last decade have introduced a variety of “bells and whistles” aimed at distinguishing one insurance company from the next. Perhaps most notable among these options is the now-famed accident forgiveness.

The option might sound good, but how much is it really needed, and under what circumstances? Here’s a quick rundown of what accident forgiveness is, how it works, and some questions to consider when adding it to your policy.

Like a variety of other insurance options, accident forgiveness is most often an endorsement added to an auto policy that protects against a rate increase in the event of an accident. Some carriers simply include the endorsement to their policies — after considering your driving record, of course. Others might only offer it after a certain period of time spent with the company or without being involved in an accident.

Sometimes a monthly premium is attached, and depending on how much you might already pay for auto insurance, you should consider a few pros or cons. For example, if you have not had an accident in the last three to five years, should you begin paying more in case you do? As a consumer, it may be better to keep that money and hope for the best.

You should also consider whether or not the money saved is worth the extra money spent in the event of an accident.  More often then not, an at fault accident will cause your rates to increase, regardless of the carrier.  With most carriers, that increase will last for 3 to 5 year. 

Of course, financial circumstances vary, and accident forgiveness might make more sense for some than for others.