What You Should Know About Accident Forgiveness

Jessica Nguyen February 26, 2021

Accident forgiveness is technically your one free-pass or one do-over (assuming your accident is not a result of a DUI) after an accident. It will still show up on your driving record but you won't face surcharges or premium increases. Accident forgiveness is a benefit added to your auto insurance policy that stipulates that your insurer will overlook an initial at-fault accident and not raise your rates. Unfortunately, accident forgiveness isn't available to all drivers.

Requirements include:

  • Have a clean driving record: You can't qualify if you've been involved in multiple accidents, traffic violations, speeding tickets, a DUI, etc.

  • Take a good driver course: Some insurers will ask you to complete a good driver course to apply.

  • Have a certain amount of claim-free years: Your insurer may require you to go 3-9 years without making a claim before you qualify.

If qualified, some insurers will then require you to buy an accident forgiveness endorsement or allow you to upgrade your policy to include accident forgiveness. But every insurer's accident forgiveness policy and procedure are different so don't make assumptions about yours based on another insurance company's policy.

Discounts Other Than Accident Forgiveness ~ Disappearing Deductibles

Not every company offers accident forgiveness or even if it is offered and you do not qualify, one discount you should look into is: disappearing deductibles. Insurance companies use disappearing deductibles to reward accident-free drivers by reducing or sometimes even completely waiving their deductibles. Basically, the longer you go without a claim, the lower your insurance deductible becomes. For example: say you have a $500 deductible and your insurer offers a disappearing deductible plan that lowers your deductible $100/year for every year you go without making a claim. So, if you have a clean driving record for four years, you could earn up to $400 which they will take off your original deductive so that if you make a claim your fifth year, you would only have to pay $100 instead of $500.

Here is a list of some companies that offer this program and their requirements:

  • Allstate Deductible Rewards Program: as soon as you sign up, you are immediately given $100 off your collision deductible and you can accumulate up to $500 off your auto insurance deductible. The deductible rewards discount is only available through the gold and platinum policy packages.

  • Hartford Disappearing Deductible Program: for every year you are accident-free, your premium goes down by $50. To qualify, you cannot have any moving violations on your driving record within the last three years.

  • Liberty Mutual Deductible Fund: it's not technically a disappearing deductible because it instead allows you to save money toward your deductible. So when you enroll, you pay $30 toward your deductible for the first year and Liberty Mutual contributes $70, giving you a total of $100, and for each year, the deductible savings goes up by $100 even though you contribute the same $30 each year. As long as you are a member, this fund never expires.

  • Nationwide Program: they remove $100 per year, up to $500 max. You have to pay $60 per year for this program and an extra $10 for each additional car on your plan.

  • Safeco: they offer a diminishing deductible as part of their 'superior' auto coverage level. This coverage reduces your auto insurance deductible by $100 every year you have a clean driving record, with a max up to $500.

  • Travelers: they offer a 'Premier Responsible Driver Plan' that includes a decreasing deductible. This coverage rewards drivers $50 in credit toward their deductibles for every six months they are accident-free, with a max up to $500.

Affordable Car Insurance with Accident Forgiveness

Which Companies Offer Accident Forgiveness?

AAA offers accident forgiveness based on qualifications and driving record, depending on the state, for example, accident forgiveness is not available to AAA members in California.

Allstate offers accident forgiveness as an add-on and to qualify, you must pay using the company's Gold or Platinum coverage plan. For a gold plan, it takes three years without an accident to be eligible but with the platinum plan, your accident forgiveness begins immediately. This coverage is also not available in California.

American Family allows policyholders to earn accident forgiveness when they go 5 years with no reports of any at-fault claims.

Erie offers several options for accident forgiveness coverage. The first plan states that the first accident isn't chargeable if you've been a customer for three years and the second plan called the Feature 15, refers to a loyalty program that forgives all at-fault auto accidents if you are with Erie for 15 years.

Farmers will forgive one at-fault accident for every three years you drive without making a claim and offer it as an optional coverage for policyholders to buy who've had a good driving record while insured with them.

Liberty Mutual offers the option to purchase a plan that will forgive your first accident and not raise your rates if you're accident-free for five years. They forgive one claim per household, not per driver and Liberty Mutual auto accident forgiveness coverage is not available in California.

Nationwide accident forgiveness applies to one accident per policy and customers have to buy it as an addition to your regular auto insurance policy.

Safeco policyholders are eligible to receive Safeco accident forgiveness as a loyalty benefit through Safeco Safety Rewards after a set number of years of safe driving.

State Farm accident forgiveness is offered for policyholders who have been accident free with State Farm, not including another insurance company, for nine consecutive years.

The Hartford provides auto policy holders with first accident forgiveness as a part of The Hartford's Advantage Plus package

Travelers offers auto accident and minor violation forgiveness for a fee, forgiving one accident or violation every three years when you purchase one of their Responsible Driver Plans

USAA offers accident forgiveness for free with no at-fault accidents after five years, and coverage is available in most states.

Is There a Deductible if I Have Accident Forgiveness?

Yes, accident forgiveness will prevent your rates from increasing after a single accident, but even if the accident qualifies for forgiveness, you'll need to pay your deductible if you're filing a claim.

A deductible is a specific amount of money you must pay out-of-pocket under your auto insurance policy before your insurance provider will pay any claims. Note that once one accident has been forgiven, a second accident could result in a rate increase. Additionally, the first accident will still appear on your driving record, which could lead other insurers to charge you higher rates.

Even with accidents that are not your fault, you still file the claim with your own insurance company and they will then pursue reimbursement from the other driver's insurance company; you'll only have your deductible covered if your insurer is able to get the other person's insurance company to cover the entire cost of damages.

Should I Not Buy Accident Forgiveness?

Accident forgiveness does have some disadvantages. One disadvantage is the fact that the program is not free for everyone, and some insurers will ask for a monthly fee. Therefore, you may want to consider saving a few dollars if you don't drive often by not buying accident forgiveness. Even when accident forgiveness is included, you may be paying more than you would for a policy without accident forgiveness.

It's not a disadvantage but it's important to note that accident forgiveness will not alter your driving record, your driving record will stay the same even if the insurer forgave the driver. Also, in some cases, accident forgiveness can be useless for drivers that cause severe accidents or get into an accident as a result of a DUI because some insurers might decide to drop the driver as a customer. In this case, drivers that switch their insurers will be penalized from the beginning because of that at-fault accident. Or because accident forgiveness is typically only offered to good drivers, and you feel that your risk of getting into an accident is very low, then maybe accident forgiveness may not be worth it. However, safety is a precaution and unforeseen circumstances should always be considered.

When Is Accident Forgiveness a Good Idea?

Without accident forgiveness, you may see your insurance premiums jump after an accident. The amount of this increase can depend on a variety of factors, such as your overall driving record and the claim amount. Ultimately, the premium increase caused by an at-fault accident could last for years and wind up costing thousands of dollars. Therefore, you should definitely accept accident forgiveness if it's included in your policy at no extra cost because if you don't have accident forgiveness, a surcharge can be as high as 90% for an at-fault accident. Accident surcharges can be very high in contrast to the cost of purchasing accident forgiveness. For several, this fact in itself makes it worth the price.

Here are some benefits that most customers with accident forgiveness get:

  • Protection from an increase in insurance premiums

  • Peace of mind while driving in risk-prone areas

  • The advantage of keeping their good driver discounts

  • And here are some situations where Accident Forgiveness would be a good idea:

  • You have a teenage driver or a new driver on your insurance policy

  • You drive more miles than the average driver and are exposed to risk-prone areas

  • You may experience a significant increase in your premium if you're in an at-fault accident

  • The relatively small addition to your premium could save you a lot of money over time in car insurance rate increases.

If you have a clean driving record and you're shopping for car insurance, ask to have accident forgiveness factored into your quotes to get a better idea of what it will cost you. SmartFinancial can help you compare coverage and prices from various auto insurance providers in your area so you can see who will offer you the best rate. If you don't already have accident forgiveness, it doesn't hurt to ask your insurance provider about how to add it to your policy.

Get a Free Auto Insurance Quote Online Now.