What Is Accident Forgiveness in Car Insurance?

Accident forgiveness is an additional coverage option some car insurance companies offer that helps you avoid an insurance rate hike when you get into your first at-fault accident.

Depending on the insurer, accident forgiveness may be added on for an extra cost or come as a benefit included in your policy for free if you have a clean driving history. Here’s how accident forgiveness works and if it’s worth buying.

What is accident forgiveness?

If you get into an at-fault accident, insurance providers may re-evaluate your risk and increase your rates to cover the cost of insuring you. How much your rate increases can depend on the accident’s severity, your driving history, and past claims.^[1]

Accident forgiveness is additional coverage you can get to stop your rate from increasing after an at-fault accident, which can save you money. You typically need to be a driver with a good driving history and no recent at-fault accidents to be eligible for accident forgiveness coverage.

If you have accident forgiveness, a fender bender, rear-end collision, or head-on collision would not increase your rate. On the other hand, accident forgiveness wouldn’t cover routine maintenance, vandalism, or non-accident-related claims.

How accident forgiveness works

Insurance providers may award accident forgiveness for free to loyal customers who haven’t gotten into an accident for several years. And if it’s not awarded to you, you may be able to purchase the coverage instead.

Let’s say you have accident forgiveness coverage and rear-end someone. The next step is filing an insurance claim and paying the deductible, if necessary, for car repairs. From there, the accident would show up on your driving record, but your car insurance rates wouldn’t increase as long as you stay with the same insurance company. If you switch car insurers, the new insurance company could factor in that accident when calculating your rates.

The rules of accident forgiveness can vary. In some cases, you only get one accident forgiven every three to five years. If you exceed the number of allotted at-fault accidents, your premiums could increase.

Who needs accident forgiveness?

Almost anyone can benefit from accident forgiveness, but it’s not a perk that all drivers are eligible for. Insurance companies typically offer it to longtime customers or as an add-on perk for drivers who have a clean driving history.

If you want to stop your rate from increasing after hitting another car or object, accident forgiveness isn’t the only option. Insurance companies may provide other driver discounts that can help reduce your rate. You can also increase your deductible, which usually results in lower premiums.^[2]

The conditions to qualify for accident forgiveness can vary by insurer. In some cases, you need to have an accident-free period of five years, but with other insurers, going 12 months without an accident could be enough to be eligible to add accident forgiveness to your policy.

Is accident forgiveness worth it?

Even safe drivers can get into accidents, and an accident forgiveness endorsement could prevent a rate increase. Comparing the cost of accident forgiveness to how much your rate might increase after an accident can help you decide if buying extra coverage makes sense.

For example, car insurance costs $267 on average for someone with an accident-free driving history. Meanwhile, insurance costs $336 per month for someone who has an accident on their record, according to Insurify data. Based on this data, you could expect premiums to increase 26% after an accident, and that accident might affect your rate for three to five years.

On the other hand, buying accident forgiveness coverage could raise your premium 2% to 9%. That small price bump could be worth the years of savings you could see if you cause an accident. But you may never get into an accident, which means you’d pay more for a benefit you never use.

What car insurance companies offer accident forgiveness?

Many insurance companies offer accident forgiveness, but availability can differ by state, and terms and conditions can also vary. Here’s a rundown of five companies that offer accident forgiveness, their eligibility requirements, and other fine print you should know.

Allstate

Allstate

Included in Gold or Platinum "Your Choice Auto" packages.

At Allstate, accident forgiveness coverage is included in the Gold or Platinum “Your Choice Auto” insurance packages. With the Gold package, your first accident within three years is forgiven. With the Platinum package, you can have an unlimited number of accidents forgiven.

GEICO

GEICO

Earn for free with a good driving history, or add for an extra cost.

GEICO customers can earn the accident forgiveness policy benefit for having a good driving history. But if you don’t earn accident forgiveness for free, you could also add it to your policy at an extra cost. GEICO accident forgiveness covers just one accident per policy, even if you have multiple drivers on the policy. However, GEICO accident forgiveness isn’t available in California, Connecticut, or Massachusetts.

Liberty Mutual

Liberty Mutual

For drivers who've been accident- and violation-free for five years.

Liberty Mutual offers accident forgiveness to drivers who haven’t gotten into an accident or had a traffic violation within the last five years. You can find out if you qualify and how to sign up by logging into your Liberty Mutual online account or calling a sales agent.

Nationwide

Nationwide

Buy as an add-on, get one accident forgiven.

At Nationwide, you can purchase accident forgiveness as a coverage add-on, and it covers every eligible driver on your policy. However, it can only be used for the first accident.

While adding accident forgiveness may increase your policy premium, Nationwide says that the savings you see from avoiding a rate increase after an accident could offset the cost. You can sign up for accident forgiveness by calling Nationwide or speaking with a local sales agent.

Progressive

Progressive

Three accident forgiveness options to choose from.

Progressive offers three accident forgiveness options — small accident forgiveness, large accident insurance, and Progressive® Accident Forgiveness. Small accident forgiveness is available to all new customers and protects you from rate hikes for insurance claims of $500 or less.

Large accident forgiveness prevents your rate from increasing after a claim of $500 or more. It’s for drivers who have been Progressive customers for at least five years and had no accidents for five consecutive years. Progressive® Accident Forgiveness is additional coverage that can be purchased and covers one accident per policy period.

Alternatives to accident forgiveness insurance

Perhaps you don’t yet qualify for accident forgiveness or you don’t want to add it to your policy. Accident forgiveness is just one of many ways you can potentially save on car insurance. Below are other discounts insurers may offer:

• Good driver discount: Driving safely is the key to getting better insurance rates. Good driver or safe driver discounts offer reductions to your rate if you have a clean driving record.^[2] Having driving offenses and severe accident claims on your record can put you in the high-risk driver category, which can increase your premiums or disqualify you from private car insurance.^[1]

• Defensive driving course discount: Insurance providers may offer you a discount if you take a qualifying defensive driving course, but this discount may be geared toward drivers of a certain age.^[2] Nationwide offers a defensive driving course discount to drivers older than 55 who haven’t had an at-fault accident in 35 months.

• Diminishing deductible: A diminishing deductible is when you get a credit for each year you don’t file an auto insurance claim. For example, if your deductible is $500, it could decrease by $100 each year for five years until it’s $0. If you get into an accident, your deductible increases again. This benefit can make it easier to meet your deductible if your car is damaged and you need to file a claim.

• Pay-per-mile: If you work from home, work part-time, or hardly use your car for another reason, insurers may offer you a policy where you pay a base rate and then another rate per mile you drive. For example, the base rate could be $50 and $0.05 per mile. If you drive just a few times per week or month, this could lead to significant savings.

• Telematics-based insurance and discounts: Telematics-based insurance policies use mobile apps or in-car technology to monitor driving behaviors and set your insurance rates based on real-life data.^[3] If you’re a safe driver who drives infrequently and within the speed limit, you may get a cheaper rate.