How Accident Forgiveness Works:
Without accident insurance, a driver who is involved in an at-fault accident (meaning that the driver is responsible for the collision) is going to have higher insurance premium when their policy comes up for renewal. Driver’s don’t like a raised premium, so the insurance companies developed a project to safeguard good driver’s against a single accident in an otherwise long history of accident-free driving.
Driver’s are offered Accident Forgiveness as an add-on feature to their policy. This allows them to have a type of ‘get out of higher premiums free’ card should they be involved in an accident that is their fault. Note that the forgiveness only applies to the first accident!
Why was Accident Forgiveness Created?
Driver’s were very unhappy with insurance companies that would raise the premium on what was otherwise a stellar driving history. Customers were leaving their car insurance company to shop for better rates from an insurer who want to insure good drivers. Accident Forgiveness was created to guard against customers from jumping ship.
Read the Fine Print!
You can’t get insurance without their being several paragraphs of fine print. You won’t be forgiven for not reading the fine print about Accident Forgiveness. It turns out that common limits or excisions apply to Accident Forgiveness. Be sure that you know what coverage you are paying by looking at the details of your policy.
Coverage not absolute
Some accident may not be covered. Accident Forgiveness is rarely a blanket add-on that will apply in all circumstances. Be sure to see whether the situations where coverage may not apply are reasonable.
Coverage only after contribution time
You may have to pay the add-on for a period of time before it is activated on your policy. This may mean that if you have an accident before the active period, your premium will still go up even though you pay for benefits that you aren’t actually getting yet!
Coverage after good driving track record
Some policies may not allow the add-on until a certain number of years without an accident have been reached. Be sure to check with the company offering you the car insurance policy that the add-on will be available to you based on your to-date driving record.
Coverage may not be 100%
While the coverage may seem like it will leave your premiums untouched- that isn’t always the case. Be sure to see if damage limits, or other exclusions which may apply the insurance company to raise your premium, but less than what it would otherwise be raised to if not for the coverage.
Coverage is not portable
The insurance company wants you to stay with them. To help them keep business, Accident Forgiveness coverage only applies to the company you bought it from. This means that if you are a good driver and have one at fault accident, your premiums may only stay at the same rate with that company. Yes, if you shop around the quote you will be seen as a riskier driver to other insurance companies. You’ll likely see that your current company remains the cheaper company for years to come because it is the only one that will calculate your insurance as if you were still an accident-free driver!
In sum, if you are okay with the exclusions, than Accident Forgiveness may be a good investment for a good driver. If Accident Forgiveness will provide you with peace of mind, then many see the add-on as a worthwhile investment.
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Questions about a car accident claim?
Contact Jeff Mitchell for a free case review. Call toll-free: 1-800-262-8104.