We all like to think we’re too good at driving to get into an accident. And usually we are – but even the best drivers get distracted, make a mistake, or miss something. If you’re at fault for a car accident, it’s not the end of the world. Your liability insurance will help pay for the damage the accident caused. Unfortunately, an at-fault accident can also shoot your car insurance premiums way up (an average of 38 percent!) when you renew your policy. That’s where accident forgiveness comes in. Accident forgiveness prevents your premium from increasing after your first at-fault accident. However, adding accident forgiveness benefits to your car insurance can increase its cost.  

Is accident forgiveness worth it? That depends on who you are and how you drive. Let’s break it down. 

What is accident forgiveness coverage? 

Accident forgiveness is one of the types of coverage you can add to your car insurance policy. It keeps your insurance premiums from rising after an at-fault accident. 

Normally, when your insurer determines that you’re at fault (responsible for) a car accident, your rates go up when you renew your insurance. That’s because insurance companies charge higher rates to drivers they see as riskier. Your driving history, especially your history of accidents, is the main way they measure your risk level. 

When you add accident forgiveness coverage to your policy, your insurance provider will “forgive” your first at-fault accident and not raise your rates for it. Your premium could still increase after an accident, since many factors go into determining it, but it won’t increase nearly as much as it would otherwise. 

Accident forgiveness isn’t available in every state or from every car insurance company. When it is available, there are two ways you might get it. Depending on the company and your plan, you may pay to add accident forgiveness coverage to your car insurance policy. Or, you might earn it over time by staying accident-free with the same insurance company. 

What is an at-fault accident?

An at-fault accident, also called a chargeable accident, is an accident that your insurance company deems you at least 50 percent legally responsible for. This can be anything from a dented fender to a high-speed collision. An at-fault accident causes damages – expenses associated with injuries, fatalities, and property damage from the accident. Your liability insurance covers claims for accidents you’re at fault, or “liable” for. The more severe an at-fault accident is, the more your premium will increase the next year. 

Not all car accidents you might be involved in are at-fault accidents. Sometimes, another person is liable for the accident. For example, if someone rear-ends you or hits your parked car, your insurance company will consider the other driver at fault. Other times, you cause an accident, but it doesn’t result in damages you’re liable for, like if you hit a deer. Your premiums generally won’t go up after this type of accident.

Accident forgiveness insurance rules

Now you know what accident forgiveness is, let’s look at how it works. There are a few rules. 

• You must start with a clean record. Insurance companies want to know you’re not a repeat offender before they offer you accident forgiveness. They usually require you to have a driving record with no at-fault accidents, moving violations, or DUIs in the last five years. Teen drivers can’t meet the requirements for accident forgiveness, since they don’t have five years of driving history.
• There are limits to the number of accidents forgiven. The purpose of accident forgiveness is to keep insurance rates low for good drivers who slip up, not to let everyone drive like they’re in Mad Max. Accident forgiveness is usually limited to one at-fault accident per policy every three years. If you cause accidents more often than that, they’ll affect your rates.
• Accident forgiveness doesn’t clear your driving record. Insurance companies might forgive, but they don’t forget. Any accident you’re at fault for will appear on your driving record. If you decide to switch insurers in the future, an accident you’ve been forgiven for might affect the quotes you get.
• Your rate could still go up. If you have a claims-free discount, you’ll lose it after an accident, even if your insurer forgives the accident. Luckily, the increase in cost from losing the discount will be a lot smaller than the increase you could see for an unforgiven at-fault accident.
• Sometimes, different coverage covers different sizes of accident. Some insurance companies offer small accident forgiveness and large accident forgiveness as separate coverages. Small accident forgiveness forgives accidents with claims less than $500, while large accident forgiveness forgives accidents with claims greater than $500. 

How much does insurance go up after an accident?

For drivers with a clean record, being at fault for a single accident raises their premiums for full-coverage car insurance by an average of 48 percent. If your premium was $800 a year before, being liable for an accident could raise it more than $384. Causing an accident is already stressful enough, and the rate increase you see later doesn’t make you feel any better. Worse yet, your premiums will stay higher for three to five years after an at-fault accident. That’s a long time to pay for a mistake.

Is accident forgiveness worth it? 

If you’ve never been in a car accident before and are nervous about the financial consequences if it ever happens, accident forgiveness is worth it for you. If you know that you or other drivers on your policy are at higher risk of causing an accident, accident forgiveness is worth it. In fact, unless you’re positive that you will never, ever be at fault for an accident, accident forgiveness is worth it. 

Accident forgiveness coverage benefits are not expensive. Adding accident forgiveness to your policy costs between $15 and $60 per year depending on your insurer and policy. Given that your annual rate could rise by hundreds of dollars after an accident and stay high for several years, accident forgiveness is an investment that could save you a lot. 

How can I get accident forgiveness on my car insurance?

If you already have an insurance policy, contact your current insurer to ask how to add accident forgiveness. If you’re searching for a new policy and want to make sure it includes accident forgiveness, reach out to an independent insurance agent. They can get quotes for policies with accident forgiveness that fit your needs and budget. Surround Insurance’s independent insurance agents are accident forgiveness experts – contact us today. We’re happy to help!