Accident forgiveness is an add-on or an additional feature of the insurance policy. It protects you from increasing rates after an accident. Most people often add this as an optional feature to their car insurance coverage. Some insurance companies offer free accident forgiveness to people who have an insurance policy for many years and not involved in accidents.
Accident forgiveness does mean that an accident caused by you won’t be documented on your driving record. If you switch to another insurance provider after an accident, it can negatively impact your insurance rates.
Moreover, insurance companies apply this feature to only one at-fault accident. If you are involved in an accident again in the future, the company will increase your premiums. Therefore, you have to act carefully and not consider this feature as an absolute immunity.
How do Insurance Companies determine Accident Forgiveness?
Insurance companies consider various factors when determining the rates of accident forgiveness. These factors include your age, car, and location. Most companies also consider your driving history as a top factor while determining the rates of accident forgiveness.
If you are an experienced driver with a good driving record, you can get low annual rates and discounts. On the other hand, if you are involved in multiple accidents, you may lose perks like low rates and discounts. In fact, this may cause you to incur an accident surcharge.
Research reports highlight that drivers causing accidents will experience a 33% increased rate for several years. But, if you have an accident forgiveness feature added in your policy, you can avoid part of this increasing rate. Keep in mind that you will still lose the discount.
Example:Suppose you have an accident forgiveness discount and pay £500 per year for auto insurance. If you are involved in a car crash and found at-fault driver, you would lose the privilege, and the insurance company will raise your rates, especially when you renew your policy.
Likewise, the insurance provider will apply an accident surcharge on your rates, increasing them to £650 for the next 3-5 years. Besides the surcharge of the accident, the company can charge you an additional amount of £800.
Advantages and Disadvantages of Accident Forgiveness
Although accident forgiveness is a great feature in your insurance policy, it is not a perfect solution for many drivers. The primary advantages of this type of feature are that the insurance provider won’t increase your rate after your first car crash. Another benefit is that the insurance company include small accident forgiveness in your policy for free if you have a clean driving record.
The downside of accident forgiveness is that this feature often costs an additional amount, raising your premium rates. The insurance company can increase your rate after a collision and remove all discounts from your policy. Furthermore, accident forgiveness is not offered to all drivers.
Final Words
Accident forgiveness is a useful feature for some drivers. Based on the advantages and disadvantages mentioned above, it is not worth for every driver. It is beneficial for those who have a clean driving history and meets eligibility requirements. So, if you are a safe driver, you must include it in your policy.
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