Oh no! You just got into a little fender bender and now you’re curious if that accident forgiveness perk you added to your car insurance will come in handy. Accident forgiveness is an option you can include in your auto policy with certain insurers, and it basically means they’ll overlook the accident if it’s your fault. So, if you’re the one to blame, it won’t hurt your rates—no scary price increase coming your way!
The Benefits of Accident Forgiveness
Are you a careful driver? If so, why not just roll the dice instead of shelling out extra cash for at-fault accident forgiveness? It’s worth considering, but first, check out how much your insurance company raises rates after an at-fault accident and weigh that against the cost of adding accident forgiveness to your plan.
As Condor points out, your premiums could jump by up to 50% after an at-fault accident. And remember, even the safest drivers can make a mistake that leads to an accident. “You can typically add accident forgiveness to your policy for under $30 a month,” she notes. This feature could save you anywhere from a few hundred to several thousand dollars in the long run.
The Downsides of Accident Forgiveness
Not every accident will automatically bump up your insurance rates. Factors like how serious the claim is, the costs involved, your driving history, and any other violations you might have all play a role in figuring out if and how much your rates will go up.
In states with no-fault insurance, where coverage helps cover all medical expenses, your insurer might take into account how much they pay out when deciding if your rates will change after you file a claim for accident forgiveness due to an injury-related incident.
Accident forgiveness isn’t available everywhere, and not all insurance companies provide it. Also, some folks might not qualify, especially if they’ve had one or more at-fault accidents or traffic violations in the last three years, according to Earl Jones, who runs an insurance agency in Sunnyvale, California.
You can only use accident forgiveness once every three to five years, so if you take advantage of it, you’ll have to wait until your policy resets before you can use it again.
What Are the Experts Saying?
If you’re unsure about whether to get this feature, think about your situation. Do you have a risky driver on your policy? Is it free with your provider, or will you have to pay for it? Also, consider your driving record and check with your agent to see if you can get it as a loyalty perk.
If you’re looking for a new policy and find this feature interesting, grab a few quotes from different insurers to compare how it works and what it costs. If it fits your budget and seems like a good match, go for it!
That said, Scott Nelson, CEO of MoneyNerd, points out that it usually isn’t worth the extra cost if all drivers have solid driving records.
If you decide to go ahead, make sure to read the fine print. Some accident forgiveness policies might not cover every driver on your policy or only apply to accidents below a certain claim amount. Be clear on what you’re signing up for regarding forgiveness.