What Does Accident Forgiveness Mean For Car Insurance?

By Sharon Gibson Posted in Car Insurance News

Definition Of “Accident Forgiveness”

“Accident forgiveness” is a relatively newer term in the car insurance world and can mean different things with different car insurance companies. Basically, “accident forgiveness” is a bullet point spelled out in your car insurance policy, which states that the insurance company that holds your policy will not raise your rate if you are in an accident.

Now, this can mean very different thingsĀ to different car insurance companies. Some companies will only “forgive” the accidents that were not your fault. So, if someone runs a red light and hits your car your insurance company won’t raise your rates when you file a claim. Some insurance companies extend the protection further. If you are a safe driver with a clean record then they will not raise your rates when you at fault in an accident.

The Catch

While this may seem generous of the insurance companies, in some cases, you may already be paying for this “benefit”. Remember, insurance companies are in the business of calculating risk. If you present a relatively low risk of filing a claim, thenĀ  some insurance companies offer you a freebie. However, there are certain restriction with most “accident forgiveness” policies. For example, one insurance company only offers the perk every five years. If you are in a minor fender-bender, then you can not get into another accident within the next five years without your premium increasing, even if it’s not your fault. Another insurance company actually charges you for the “accident forgiveness” they claim is free. If you choose a policy with an accident forgiveness clause, then your premium will be slightly higher than a similar policy without the accident forgiveness.

There is a bright side; the slightly higher premium, in most cases, would be lower than your policy premiums post-accident without “accident forgiveness”. The important thing to remember with “accident forgiveness” is that it becomes null and void if you have any blemishes on your driving record. This includes traffic tickets and other violations. Sometimes even outstanding parking tickets can affect the validity of your “accident forgiveness” policy. It is important to thoroughly examine your insurance policy and ask questions if your don’t understand the fine print.

Related posts:

  1. Is It Cheaper To Pay For Accident Forgiveness Insurance Or Not?
  2. If I Report An Accident, How Much Will My Car Insurance Rate Go Up?
  3. What Does No-Fault Insurance Mean And Work?
  4. How Does My Credit History Affect My Car Insurance Coverage Rate?
  5. Short Study Guide To Getting The Lowest Los Angeles Car Insurance Rates

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