What Is Accident Forgiveness and How Does It Work?

You have maintained a squeaky-clean driving record for as long as you can remember. And this has not been easy at all. However, one day you get caught up in an accident. You are at fault, and it’s devastating. But then you remember that you have an accident forgiveness policy. Will the accident affect your insurance rates in the future? How exactly does accident forgiveness work? These issues can be confusing, especially if this is your first accident. Luckily, we have detailed the A-Z of accident forgiveness, from how it works, qualifications and even what is not covered.  

What is accident forgiveness?

This is a feature on auto insurance policies that safeguards a driver's clean driving record from being negatively affected after the occurrence of an accident where the driver was at fault. This means that the insurance premiums are not increased due to the occurrence of an accident. While it is a great way to save on auto insurance, not every at-fault accident qualifies for accident forgiveness. In most insurance companies, only the first accident after a driver has maintained a clean driving license for a given period qualifies for accident forgiveness. Accident forgiveness can be obtained by paying extra and adding it to your auto insurance or having it offered by your insurer for being a loyal customer and safe driver. Some insurers offer accident forgiveness as a perk for loyal customers and a paid policy for others.  

How does accident forgiveness work?

You qualify for accident forgiveness if you maintain clean driving records over a specified period. Some insurance companies also sell accident forgiveness policies as endorsements to auto insurance policies. However, not all insurance companies offer accident forgiveness. As such, it is vital to check with your insurer and see whether they have the provision. However, you must know that if you have had speeding tickets in the past, auto accidents and other violations, you do not qualify for accident forgiveness.

Which drivers qualify for accident forgiveness?

As we have stated above, not all drivers qualify for accident forgiveness. It is a way of rewarding those drivers with clean driving records. So, what is the eligibility for qualifying for accident forgiveness?

• You must have active auto insurance- You cannot claim accident forgiveness if you have not renewed your auto insurance or it's no longer active.
• You must not have been involved in an accident for a certain period. For most insurers, this period is 6 years.
• You will still be eligible for accident forgiveness if you sell your old car and get a new one, as long as you remain actively insured.
• Accident forgiveness only applies to private passenger automobiles. Commercial auto policies do not include accident forgiveness.
• Some insurers may offer accident forgiveness policies to new customers.

What is not covered in accident forgiveness?

Accident forgiveness has conditions and limitations. While we already know that it provides coverage for the first at-fault accident in a given period, insurers have varying guidelines and rules pertaining to accident forgiveness. Some of these are:

• Accident forgiveness will not work if you switch insurers. If you had accident forgiveness with your insurer, you might lose it if you switch to a different insurer. Also, your other insurer may have a longer accident-free timeframe for accident forgiveness consideration or they may not offer it all.
• You need to be accident-free for a certain period. If you have been involved in an accident, no matter how minor, or even had a speeding ticket, then accident forgiveness does not apply. This is why very few drivers are eligible for accident forgiveness.
• Accident forgiveness only protects the primary driver on the policy. It does not protect other listed drivers or even dependents.
• If you are convicted of a major driving offence, then accident forgiveness is automatically cancelled.
• Insurers have an accident forgiveness qualifying period. This means that you must hold auto insurance with your insurer for a given period before you can qualify for accident forgiveness. For instance, if you insure your motor vehicle a week before an accident with a new insurance provider, you may not qualify for accident forgiveness. However, insurers have varying rules surrounding this.
• Accident forgiveness will not protect you from getting demerit points.

Is accident forgiveness worth it? You may ask.

If you have clean driving records, then you should get good auto insurance rates. It may also be important to get accident forgiveness to add extra protection in case an accident occurs. If you want to get accident forgiveness, the first thing you should consider is the cost in instances where your insurer does not offer it for free. This will determine the worthiness of the policy. For instance, if the annual cost of accident forgiveness per annum is $200 and you have not been involved in an accident for five years, you are spending an extra $1,000 on your auto insurance. If you don’t drive much and you are a less-risk driver, then this might be an unnecessary cost. However, if you still need extra protection in case an accident occurs, accident forgiveness will come in handy.

What are the drawbacks of accident forgiveness?

• Not all accidents will raise your auto insurance rates. Before increasing the insurance rates, insurers consider many factors such as your driving record, the cost of the claim as well as any violations made. This means that you might be paying an extra amount only to get involved in an accident that will not raise the cost of your insurance.
• It can only be used once within the specified period. If the period provided by your insurer is six years, then you need to wait for eligibility to use it again.
• A minor accident or offence may disqualify you from accident forgiveness

Are there any alternatives to accident forgiveness?

If accident forgiveness is not an option for you, consider looking out for:

• Good driver discounts- These are auto insurance discounts for safe drivers. These can significantly reduce the cost of your insurance.
• Vanishing deductibles- This is an option where safe drivers enjoy reduced deductible amounts provided they maintain clean driving records.

Bottomline

Accident forgiveness is a nice-to-have policy. However, if you do not qualify for it or you do not want to purchase an accident forgiveness policy, ask your insurer for discount options available for safe drivers.