The Rise of Accident Forgiveness in Auto Policies
There are few things worse than getting into a car accident. The physical damage to your car, injuries you may suffer and the time you will waste getting your vehicle repaired are just a few of the hassles you will need to deal with. Adding insult to injury is the premium increase. While it varies by a number of factors there is a good chance that your premiums could rise by as much as 40 percent.
While you may thing that a higher premium is automatic after an accident, it doesn’t have to be. Accident Forgiveness is a feature that more and more insurance companies are offering.
What Exactly is Accident Forgiveness?
Simply put, Accident Forgiveness allows a policyholder to have an at-fault accident and avoid a rate increase. This can be a big comfort, giving you peace of mind that even if you are in an accident your premiums will stay the same. In many cases Accident Forgiveness is bundled with a Vanishing Deductible which means that your deductible will drop $100 every year that you are accident free. Unfortunately, like many things in life, there is no such thing as a free lunch.
Accident Forgiveness is almost always an add-on to a policy or only available on high-end policies meaning that you will end up paying an additional charge for Accident Forgiveness. While the increase you will end up paying for Accident Forgiveness is often less than the increase you will experience after an accident, it is not a feature that you will get for free.
The Devil is in the Details
In addition to the higher premium you will be paying, there are other details that you should be aware of before signing up. In many cases you will need to have a clean driving record for the last 3-5 years to even qualify. You will have to read the policy or talk to an agent to determine what type of restrictions and requirements affect the policy you are considering.
As an example, one of the major insurers only offers Accident Forgiveness on their Gold or Platinum plans. The Gold Plan costs roughly 8% more than a standard policy while Platinum is 15% more expensive. With the Platinum plan you are rewarded with Accident Forgiveness immediately, not so with the Gold Plan, you must be accident free for 3 years before Accident Forgiveness is offered.
Is it Worth It?
So is it worth it? It really depends on your driving record and how much you are willing to pay for the peace of mind it offers. If you are a safe driver that has gone years without an accident there is often no need for accident forgiveness. Accident Forgiveness does offer a certain peace of mind so if the cost is minimal you might want to consider adding it to your policy. Remember that if you are in an accident your record will be reset and there is a good chance you will no longer qualify for this add-on.
On the other hand, if you have been in a number of accidents in the past you may want to consider adding it, provided that you qualify. You should also consider the drivers on your policy. If you will be adding a teen driver in the near future Accident Forgiveness can be well worth the cost. Read the fine print as some policies may exclude recently minted drivers.
In the end, deciding to add Accident Forgiveness is a personal decision and will depend on many factors. Running the numbers can often help make the advantages or disadvantages clear. Compare premiums and shop around for the best price on this add-on coverage.
