Is Accident Forgiveness Just a Gimmick?

If you've seen the commercials talking about accident forgiveness, no doubt you've been interested. The insurance company makes themselves out to be extremely friendly and trustworthy, like they just want to help you. And because they only want to help you, they are going to let you get away with one collision - no consequences.

Sound too good to be true?

Read on.

What exactly is Accident Forgiveness?

Accident forgiveness is essential a clause in your insurance agreement that says that your rates will not rise after the first collision you are responsible for.

Why is this so valuable? Because normally your rates would shoot up as much as 40% after being at-fault for a collision. That means that an accident forgiveness clause could potentially save you hundreds of dollars a year from the time of your first collision to your next.

What's the catch?

You have to pay higher premiums in order to get that clause. Significantly higher premiums. How much higher depends on your driving history. If they think you will get into a collision soon, you'll have to pay a lot for the clause. If it's unlikely you'll get into a collision anytime soon because of your great record, you won't have to pay much at all - but do you even need it in that case?

Who even qualifies for it?

As a matter of fact, very few people will be offered an accident forgiveness clause. You have to have a well-established, safe driving record for them to offer it to you.

For the people who need it, people who have trouble staying out of collisions, you just don't have a shot.

Accident Forgiveness - Who should and who should not

People looking to save

This will only add to your premium. Just drive extra safely. If you don't get into a collision for a year or two, then your decision will have been a good one. If you have a pretty clean record already, you rates won't rise all that much after one accident anyhow.

Teens

Surprisingly, teen rates usually don't go up at all after one at-fault collision anyhow. This is because teens are kind of assumed guilty until proven innocent. Teens get the rates that bad drivers get, so one accident doesn't change their profile. Accident forgiveness makes no sense for teenage drivers.

People with Bad Driving Records

If it makes financial sense for you to get this, then you probably don't qualify for an accident forgiveness clause.

People with Great Driving Records

If you've got a clean record, avoid accident forgiveness unless you plan on crashing into somebody soon. Actually, even then you won't be forgiven since it's intentional! It doesn't make financial sense to pay for something that you probably won't use and won't benefit much from anyhow.

Is there a financial alternative?

If your rates go up a lot after a collision, get auto insurance quotes. Comparing auto insurance quotes will help you find the best premiums. Ask the companies you got affordable auto insurance quotes from about their point plans - which tell you how much rates go up after a collision.