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Accident forgiveness: what is it and is it worth it?

Fact-checked with HomeInsurance.com

Getting into an accident is one of the more negative experiences you can have as a driver. It usually means a trip to the repair shop, and in some cases, replacing the car entirely. Accidents also cause your car insurance rates to spike, even if you weren’t at-fault. If you’re worried about a rate increase after an accident, opting for accident forgiveness coverage can give you added assurances on the road.

What is accident forgiveness

Accident forgiveness is a type of car insurance coverage that ensures your rates won’t increase after the first at-fault accident. Sometimes it’s automatically included in car insurance policies, but most of the time, it’s sold as an add-on coverage — otherwise known as an endorsement. Accident forgiveness can save you a lot of money if you get into an accident, but not every collision is covered. Oftentimes, car insurance companies will only waive the first accident on your insurance policy. 

How accident forgiveness works

Every insurance company approaches accident forgiveness differently, and most companies have specific qualifications for accident forgiveness coverage. For example, Erie offers accident forgiveness for free after you’ve been a customer for three years. Other companies require drivers to have a clean driving record for a certain period of time before they can qualify for coverage.

The way accident forgiveness works is very simple. If you get into an accident, you file a claim with the insurance company like normal. The insurance company reviews the evidence, inspects the damage to your car, and determines the cost of the claim. If that cost falls under the maximum limit for accident forgiveness, your premium wouldn’t increase, and it is as if the accident never happened as far as insurance is concerned.

Similar options

Not every driver qualifies for accident forgiveness. Even if you’ve never been in an accident, you might be denied if you have multiple traffic violations on your record. If you can’t get accident forgiveness coverage, there are some similar options that can provide savings. For example, you can usually get a discount on your premium for being claims-free. Some companies also offer a disappearing or vanishing deductible program, which lowers your deductible for every year you don’t have an accident.

Rate impact

The biggest benefit of accident forgiveness is that it won’t cause your rate to increase after an at-fault accident. However, your rate could still go up after a crash, even with accident forgiveness, depending on the discounts you currently have. Certain discounts require you to be accident-free, so you would most likely lose those discounts after an accident. As a result, your rate would still increase slightly despite having accident forgiveness.

What companies offer accident forgiveness?

Allstate

Allstate offers accident forgiveness as an add-on coverage for drivers with a good record. The company also offers a Safe Driving Bonus program which rewards drivers with a lower premium for every six months they go without an accident. There’s also the Allstate Deductible Rewards program, which lowers your collision deductible by $100 for every accident-free year.

Progressive

Progressive offers both small and large accident forgiveness. In most states, small accident forgiveness is included in all new car insurance policies. Small accident forgiveness covers claims up to $500. Progressive customers in the Loyalty Rewards program can get large accident forgiveness if they have been a customer for at least five years, and are accident-free and violation-free for at least three years. With large accident forgiveness, any accident is covered, even if the cost is over $500.

USAA

USAA customers can get free accident forgiveness coverage after five years as a customer, but only if every driver in their household has not had any at-fault accidents in that period of time. However, drivers in Connecticut, Delaware, North Carolina, California and New York aren’t eligible for coverage.

Who needs accident forgiveness

Many drivers can benefit from accident forgiveness coverage. But specifically, individuals who have never been in an accident benefit the most. That’s because most insurance companies will typically only cover the first accident. For drivers who have had one or two accidents already, the coverage wouldn’t apply.

To get accident forgiveness, drivers usually need to have been continually insured by the same company for a certain period of time. Qualifications may also apply based on your driving record.

Who doesn’t need accident forgiveness

Ironically, the drivers who don’t need accident forgiveness are the ones who have a bad driving record. If you have any accidents or violations on your record from the last year or two, you probably won’t be able to get approved for accident forgiveness insurance. Even if you did, most insurance companies only cover the first accident. When you get into a second or third accident, you normally can’t take advantage of the coverage. In rare situations, an insurance company may offer accident forgiveness multiple times, so long as it has been 5 years or more since your last incident. 

Pros and cons of accident forgiveness

Accident forgiveness isn’t a perfect solution for all drivers, considering the additional cost. Here are some of the advantages and drawbacks to consider:

Pros:

  • Your rate won’t increase after a first accident.
  • Small accident forgiveness is automatically included in some policies.

Cons:

  • In most cases, only the first accident is forgiven.
  • The coverage often costs extra, which raises your premium.
  • Your rate can still increase after an accident if it impacts claims-free discounts.
  • Not every driver is eligible for coverage.

Is accident forgiveness worth it?

Accident forgiveness can be a handy coverage to have—but only for certain drivers. Based on the pros and cons listed above, accident forgiveness isn’t worth it for everyone. It’s only beneficial for drivers who have no history of accidents and meet all the other eligibility requirements. If you’re already a very safe driver, you might end up paying for accident forgiveness coverage and never use it. However, it can be useful if you are newer to driving and unsure what your driving future holds.

Alternatives to accident forgiveness

If you aren’t eligible for accident forgiveness, or are just looking for an alternative, there are some other ways to keep your rate low after an accident. The most effective way to get a lower premium is to take advantage of discounts. For instance, most insurance companies offer a discount to drivers who take an approved defensive driving course. Other common discounts include policy bundling, paying your premium in full and upgrading the safety features in your car. You can also get a cheaper monthly rate by raising your deductible in some cases. 

Why is accident forgiveness not available in California?

Unfortunately, California drivers are out of luck when it comes to accident forgiveness. After Proposition 103 was passed in 1988, insurance companies were no longer allowed to charge excessive rates without justifying the reason. The proposition banned insurance companies from offering accident forgiveness coverage because charging drivers a higher rate before having an accident was considered excessive.

The takeaway

  • Accident forgiveness coverage prevents your rate from increasing after an accident.
  • Many large insurance companies, like Allstate and USAA, offer this coverage.
  • There are pros and cons to accident forgiveness coverage, and not every driver qualifies.

Accident forgiveness can be great for some drivers, but eligibility can be an obstacle, and it usually only applies to a first accident. Not to mention, most insurance companies charge a higher premium if you get accident forgiveness as an optional coverage, or for higher claim accident forgiveness. If you have a clean driving record, you can probably save more money by taking advantage of claims-free discounts, or enrolling in a disappearing deductible program. 

Elizabeth Rivelli

Elizabeth is an insurance writer for coverage.com, where she covers insurance providers and reviews policies to help consumers find comprehensive and affordable coverage for every area of their life. She has more than three years of writing experience for top online insurance and finance publications.

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