Should You Add Accident Forgiveness to Your Auto Policy?
When it comes to insurance, it’s all about reducing risks. The whole point of insurance is to help you hedge against the risk that unexpected events could financially devastate you — or at least cost you a great deal more than you would like to pay. If you have an auto insurance policy, you might find that it offers another risk-reducing feature: accident forgiveness.
What is accident forgiveness?
Accident forgiveness is a feature on some policies that allows you to have an at-fault accident without experiencing a premium increase. Some policies will even let you have more than one at-fault accident without a premium increase. Since it is common practice to hike insurance premiums by up to 40% after an at-fault accident, this auto policy feature can seem like a good idea to help you save money in the long term.
However, as you might guess, this sort feature does come with a cost. Most insurance companies aren’t just going to give you a free pass if you become a higher risk to them. Adding accident forgiveness to your auto insurance policy is probably going to cost you a little more up front. You’ll see a premium increase anyway, although it might be lower than the increase you’d get if you actually caused an accident.
Realize, too, that not everyone is eligible for accident forgiveness. There might be a requirement to be a customer for a minimum amount of time before accessing the feature. In some cases, you have to show a driving record free of moving violations and accidents for a certain number of years, usually three or five. You will need to find out what sorts of restrictions are on the accident forgiveness feature as well, if you are considering adding it to your policy. You might be surprised at what you find.
Who can benefit from accident forgiveness?
Due to costs and restrictions, accident forgiveness isn’t for everyone. Indeed, if you have a good driving record, and you are a careful driver, not likely to be at-fault for an accident, you might find that accident forgiveness is unnecessary. Compare the costs of policies with accident forgiveness against a standard policy. If you have a clean record, and are unlikely to run into issues that will affect your policy in the near future, it may not be worth the cost to pay for accident forgiveness.
On the other hand, if your insurance premium is already somewhat high due to problems in the past, it may be worth it to switch to a new policy with accident forgiveness (if you meet eligibility requirements, of course). Another consideration is who might be driving soon. Some parents get accident forgiveness as their teenage children begin to drive. Before you sign up, though, it is a good idea to speak with your insurance agent. In some cases, there is de facto accident forgiveness due to your paying an elevated rate because of the increased risk associated with teen drivers. Before signing up for accident forgiveness, find out what sort of premium increase is expected for the first no-fault accident your teen gets into. Then compare costs based on that.
In the end, it’s up to you to run the numbers and see whether or not accident forgiveness is for you. Shop around, compare policy costs and consider consulting a professional who can help you figure things out.
Recommended articles:
All posts by Miranda Marquit (Staff Writer)
Free Insurance Quotes
Insurance Articles
- Health Care Reform: Appealing a Health Insurance Claim Denial
- Fixed Annuities Pros and Cons
- The Basics of Long-Term Disability Insurance
- Should You Add Accident Forgiveness to Your Auto Policy?
- Getting the Most Out of Your Health Insurance Before 2010
- Open Enrollment Time: A Guide to Your Benefits Package
- 11 Tips On How To Get the Right Life Insurance Policy
- 15 Insider Insurance Shopping Tips From State Farm
- 10 Things To Know When Buying Insurance Policies
- Life Insurance and Medical Information Bureau (MIB)
Insurance Q&As
- AllState Ins. fighting me when I am too sick to fight them
- Why can’t you get life insurance if you have a criminal record?
- Is great northern insurance company connected with mib?
- What kind of life insurance is better for me, term or permanent?
- Who do I contact to find out if someone who has died had life insurance?
4 Comments. Please add yours!
Discuss. Share. Interact. Please leave a comment!
Comment Rules: Constructive criticism is welcomed. Please use your PERSONAL name or initials and not your business name or URL, as the latter comes off like spam and I'll most likely delete your comment. Have fun and thanks for adding to the conversation! Here's our comment policy and guidelines.
Important Notice:
The information found on Moolanomy is provided and intended for informational and entertainment purposes only and does not constitute financial, legal, or other advice of any kind. The information contained on this site is aimed at a general audience, and does not attempt to offer specific advice to your specific circumstances. If you are looking for professional advice, you should consult with an independent financial adviser.This site contains information about third party products and services, such as credit card offers, online banking, discount brokers, and credit score services. While we endeavor to ensure that the information presented on this site is accurate at the time of publication, any offers and rates shown on Moolanomy can and do change without notice. Visit the official site of the offer for up-to-date information.
For additional information, please review our Terms and Conditions.
If you qualify for accident forgiveness I do not see any reason not to have it. Yes it will cost you a few dollars but an accident will cost you a few hundred and maybe thousands extra.
Why not? Take the accident protection… life is unpredictable, maybe you get into a crash. It’s surely going to save a bunch of money.
I think it depends on your needs. We’re very defensive drivers, and we have a low premium. We talked to our insurance agent, and if we got in one accident, that was our fault, we would see an increase that amounts to less than if we paid for accident forgiveness for a couple of years. It’s all about the cost-benefit.
If you are a good driver, I personally don’t think it’s worth it. I had one of those policies but once I shopped around, I was able to find the exact same coverage with the #1 insurer in the country for much less. I was paying almost 3 times more than I had to for “accident forgiveness”.