What is accident forgiveness?

Accident forgiveness is a policy endorsement that "forgives" your first accident, meaning the insurance company won't increase your rates because of the accident.

To qualify for this type of coverage, you usually must meet certain standards, which can vary from insurer to insurer. Liberty Mutual, for example, requires drivers to have five years of accident-free driving to qualify.

There are usually limits to accident forgiveness that also vary by company; very serious accidents usually don't qualify. The insurer may have a maximum claim amount to qualify; anything over that threshold will still be chargeable.

Is accident forgiveness worth it?

It depends on your household and the people who drive your vehicles. If you have an accident-prone driver in your home (think teenager or young driver) it may make sense to add accident forgiveness to your policy.

While it varies dramatically by insurer, accident forgiveness will typically add $20 to $60 to your annual insurance bill. On the other hand, an at-fault accident will push up your rates by 20% to 50% depending on your insurance company. In many cases, the cost of accident forgiveness may be well worth it.

It's important to remember that even if your rates don't go with accident forgiveness, you’ll most likely lose any good driver or claim-free discount that has been applied to your account.

What are the different types of accident forgiveness?

Accident forgiveness can take a few different forms. It can be an earned benefit or something that requires an additional premium. Here are the most common types of accident forgiveness:

  • Paid add-on to your policy: Some insurance companies -- Nationwide is one example -- offer accident forgiveness as an add-on to your policy, which means you have to pay for it. The cost will vary by insurance company but will often be between 2% and 10% of your premium.
  • Customer perk: Other insurance companies will offer accident forgiveness at no additional cost to long-term customers who have not had an accident in years. The requirements will vary by insurer. Some carriers want you to be accident-free for at least three years. Other insurers require five years of accident-free driving.
  • Hybrid: Some insurers offer a paid accident forgiveness add-on that eventually becomes free once you pass a certain threshold (typically three to five years) of accident-free driving.

How does accident forgiveness work?

When you are in an accident, it's almost a given that your insurance will increase. In general, minor fender-benders are surcharged the same regardless of whether you do $200 or $2,000 worth of damage.

If you have accident forgiveness on your policy, your insurance company will not raise your rates due to the accident, as long as it meets the requirements. While your rates will not rise due to the accident, it is very possible that you will lose any safe driver discount that has been applied to your policy – resulting in a small bump in your premium.

Do insurance rates go up after an accident claim?

If you are at fault for the accident, yes. Filing a claim for an at-fault accident means you're a higher risk to the company and are costing it money. The insurer will raise rates to recover the cost.

Your rates likely won't go up if you weren't at fault for the accident, however.

Read more about how much does accident increase car insurance in each state.

Should you always file a claim if you have accident forgiveness?

Just because you have accident forgiveness doesn't mean every claim is worth filing. First, you should check your deductible. If the damage is below that amount, or close to it, it's probably not worth filing a claim. You should also ensure it meets the requirements for accident forgiveness.

There are a few other things to think about too.

Accident forgiveness means an accident is forgiven, not forgotten.

The particulars of accident forgiveness vary by insurer. It might be free to drivers who qualify, or you may have to upgrade to a premium policy. Certain insurers will add it to your policy immediately, while others require an accident-free record for several years. In some cases, a simple speeding ticket will disqualify you.

tip iconTIPLiberty Mutual offers accident forgiveness for free to qualifying customers, according to company representative Glenn Greenberg. "Accident forgiveness means the price won't go up due to a customer's first accident if their driving record is accident-free and violation-free for five years -- whether they have been with Liberty Mutual or a prior insurance carrier," Greenberg says.

However, forgiveness doesn't mean the accident never happened. The incident still appears on your claims report and will stay there for three to five years. It also should be noted that accident forgiveness isn't portable. If you decide to switch insurers, the accident will be used when calculating your premium with the new company.

Paying out of pocket may be best

If you can afford to pay for a minor fender bender out of pocket you are probably better off, as you get to save your accident forgiveness for a larger accident.

However, if you cannot afford to cover an accident out of pocket, using your auto insurance may be the only option. Auto insurance is designed to help avert financial disaster. If that requires filing a claim, so be it. However, don't file a claim just because you can.

How do I qualify for accident forgiveness?

While it is possible to pay for accident forgiveness with some insurance companies, in most cases, you will need to be accident-free for at least three to five years to qualify. Check with your insurance company regarding what they require to qualify for accident forgiveness, once you have reached that threshold, ask them to add it to your policy.

What are the best insurance companies for accident forgiveness?

The best company for accident forgiveness varies by personal factors including the state you live in. A few states, including California, do not allow insurers to offer accident forgiveness. Check with your current insurer about their accident forgiveness options. If you’re not happy with their options, shop your coverage.

Here is a quick overview of a few insurer's accident forgiveness programs:

  • Liberty Mutual: Liberty Mutual offers accident forgiveness as a perk if you have been accident-free for five years and the perk applies to all drivers in your household, including teens.
  • Nationwide: Nationwide will charge you for their accident forgiveness program and the cost will vary depending on your personal factors.
  • Geico: Geico offers accident forgiveness as both a perk and as a purchased add-on to your policy. In order to qualify for it as a perk, you must be over 21 and accident-free for five years. Accident forgiveness is not available in California, Connecticut or Massachusetts.
  • Allstate: Allstate is a bit different from other insurers when it comes to accident forgiveness. Allstate requires policyholders to be carrying their Platinum of Gold coverage plan to qualify. The Platinum plan activates accident forgiveness immediately. The Gold plan requires three years of accident-free driving to qualify.

Lowering your car insurance rates after an accident

If you are involved in an at-fault accident and do not have accident forgiveness on your policy, your rates most assuredly will increase.

A few tips to bring your premium back down:

  • Shop your coverage: This is probably the best way to lower your premium. Insurers rate risk differently, which can result in dramatic differences in premium quotes. Shop at least five insurance companies and make sure you are comparing apples to apples when it comes to coverage levels and deductibles.
  • Discounts: Insurers offer a wide variety of discounts. Make sure that all discounts that you are qualified to receive are being applied to your policy.
  • Up your deductible: If you can afford to up your deductible, your premium should drop. Double your deductible and your premium should be headed down to a more affordable level. Always choose a deductible that you can easily afford if you have to make a claim on your policy.

Learn more about other ways to lower your car insurance rates.

Alternatives to accident forgiveness

If you don't currently qualify for accident forgiveness, you should ask your agent about other discounts that may help you lower your premium. Many insurers offer a good driver discount or a long-term customer discount if you have been with your insurer for a long time.

In addition, some insurers offer a vanishing deductible that reduces your deductible by a set amount (often $100) each year you go accident-free. This is a great way to lower your costs.

Auto insurance FAQs

Should I get accident forgiveness?

If accident forgiveness is being offered to you as a perk for being a great customer, you should absolutely add it to your policy as there is no real downside.

On the other hand, if you must pay for this coverage, you may want to consider the costs and whether it is worth it to you personally. If you are a careful driver who hasn't been in an accident in years, it's probably not worth the additional cost. But if you tend to get in an accident every few years it may be worth the price.

Can car insurance be canceled after an accident?

Yes, you can cancel your insurance at any point, and it shouldn't impact your claim. You do need to cancel your policy correctly, which usually means sending in written notice or at least calling your agent who will likely have you email a written request for cancellation.

As far as your insurer, it cannot cancel your insurance just because of a claim if your policy has been in force for more than 60 days. However, it may not renew your policy when it is up for renewal. It also can cancel your policy if you haven't paid your premium, misrepresented yourself on the application, or if your driver's license has been suspended or revoked.

How much will my car insurance go up after an accident?

It will vary depending on your insurance company as well as the details of the accident. But, in general, you should expect your premium to go up 20% to 50% after an accident and you will be paying those increased rates in most cases for at least three years.

How do I know if I have accident forgiveness on my Geico policy?

Geico offers accident forgiveness as both a policy perk to drivers who haven't had an accident in several years, or it can be purchased as an add-on to your policy. Checking whether it is on your policy is easy, according to Geico's website:

  • Log in to your policy
  • Select your auto policy
  • An accident forgiveness notification may be shown as a reward
  • If you purchased accident forgiveness, you have a few additional steps:
  • Select "My Policy Details"
  • Accident forgiveness may be shown as an upgrade

Read more about the customer ratings and reviews of Geico.

Do you pay extra for accident forgiveness?

It depends on your insurance company. Many insurers offer accident forgiveness as a perk for customers who have been accident-free for three to five years and, in these cases, there is no charge for the coverage. Many insurers also offer accident forgiveness as extra coverage for an additional premium.