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If you’ve ever been in a car accident, you know that premiums usually increase dramatically after a collision. An accident claim in many cases will push your rates up 20% to 50%.

One way to avoid a big jump in your premium is to have accident forgiveness on your car insurance policy.

Accident forgiveness is simply extra coverage you can add to your policy that ensures that your premium will not go up after your first accident. Some insurers offer it as free coverage while others may require you pay extra. However, most insurers require three to five years of accident-free driving before allowing you to add this coverage to your policy.

What follows is a look at accident forgiveness, how it works, how much it costs and other information to help you decide if accident forgiveness is right for you.

  • If you're in a minor accident and the claim amount barely exceeds your deductible, then it's better to pay out of pocket.
  • If you do make a claim, your premiums can go up in three ways: you could pay an accident surcharge, your base rates might rise or the discounts that reduce your premium may disappear.
  • Accident forgiveness is offered by some car insurance companies and means your rates should not rise due to your first accident
  • To obtain accident forgiveness as a perk on your policy, most insurers require an accident-free record for at least a couple of years but may be up to five. This offering may be free or require you to upgrade to a premium policy.
  • Even without accident forgiveness, some auto insurance providers may waive surcharges for your first accident and those with minor damages.

What is accident forgiveness?

On average, car insurance rates go up about 30% after one at-fault accident with more than $2,000 in damage, according to Insurance.com rate data. But if you have accident forgiveness on your policy, you won't need to worry about the rate increase.

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.

Is accident forgiveness worth it?

There is no universal answer to this question. 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 the cost.

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.

Based on a 2021 Insurance.com report that looked at full-coverage quotes from three major carriers for a single, 40-year-old woman in Ashland, Ohio, driving a 2013 Buick Lacrosse, rates rise as much for a $100 claim as they do for much larger ones at some companies:

Claim amountCarrier 1Carrier 2Carrier 3
No claim$906$1,016$974
$0 to $100$1,088$1,537$1,658
$10,000 or more$1,568$1,537$1,658

If you have accident forgiveness on your policy, your insurance company will not raise your rates due to the accident. 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 costs go up after an accident claim?

In most cases, 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.

Shopping your coverage after an accident is always a good idea to see if you can save some money by switching insurers. There are several tools you can use, such as Insurance.com's online quote comparison tool.

What to do if you are in an accident

If you are involved in an accident there are a few things you will need to consider before filing a claim. Here is a quick overview of items to think about before calling your insurance company:

  • Insurance rates go up after accident, should you file a claim: If you were in a minor accident and the claim amount is barely above your deductible, pay out of pocket. Making a claim will result in negligible savings and any rate increase (usually for the next three years) will put you on the losing end of the deal.
    How small is too small? Industry experts suggest paying out of pocket for anything under $2,000 if you can afford it. Once you go over the $2,000 mark you may want to file a claim. But be aware that your rates will be increasing unless you have accident forgiveness. 
  • Insurance costs go up after an accident claim: Once you make a claim on your policy your rates will be headed up. This is particularly true if the accident is your fault. How much your rates go up will depend on your insurance company. They all have proprietary algorithms that access a surcharge once a claim has been made on the policy. Expect your rates to jump between 20% and 50% after an at-fault accident.
  • There are three ways insurance rates go up after an accident: You can pay an accident surcharge, your base rates could rise, or you could lose the discounts that cut your bill.

Insurance carriers have surcharge schedules that specify exactly when rates go up and why. However, every company has its own schedule and rate increases also can be affected by state laws.

An insurance company with the cheapest rate may have the most expensive penalty, in the form of surcharges, for accidents. It's wise to request your insurer's surcharge schedule so you know what could happen with your rates if you have to file a claim.

Some companies may not surcharge a first accident or an accident where the damage is less than a certain amount. Even so, you may see an increase in your base rates because you have been moved to a riskier tier of drivers. Many states allow insurers to put drivers into buckets and base their rates on the group as a whole, so if your insurer moves you to a more claims-prone crowd, you'll end up paying more for your base premium.

The final way your rates may increase after an accident is if you lose your safe driver discount. Losing that discount will increase your premium even if there has been no surcharge or increase in the base rates. In almost all cases, the rate increase is going to stay in effect for at least three years.

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.

How long does an accident stay on your record?

It varies by insurance company but, in most cases, an accident will stay on your insurance record and impact your premiums for three to five years. It's possible to ask your agent or insurer how long an accident will raise your rate so you are aware of how long you will be paying a higher premium.

Insurance companies rate risk differently, which means that some insurers may raise your rates less than others for an accident.

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.

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.

Frequently asked questions

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

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.

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