Getting a Pass: Car Insurance Accident Forgiveness
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Many car insurance companies offer accident forgiveness, a feature that could prevent your premiums from rising at renewal time if you’ve caused a car accident. Typically, it costs extra to add to your regular car insurance policy and requires you have a clean driving record for several years before you can opt in.
Accident forgiveness may not be available in every state, and it is rarely available in California.
Accident forgiveness among larger insurers
Offers accident forgiveness option in some states?
Cost of accident forgiveness
NerdWallet analyzed car insurance rates with and without accident forgiveness to get an idea of the charges.
We found that many insurers charge an additional 2% to 9% to add accident forgiveness to a policy. Rates sometimes varied depending on the state and the amount of coverage on the policy.
Some insurers charge a percentage of the premium, while others tack on a flat fee for accident forgiveness. Examples of accident forgiveness pricing include:
Amica charges 8.3% to 8.9% in Illinois, Ohio and Oregon for the rates we analyzed.
Geico charges about 5% more in Illinois, Ohio and Oregon, and 7% in Pennsylvania.
Liberty Mutual charges $144 per year in Ohio, regardless of policy cost or coverage.
Nationwide Insurance adds $35 to $117 per year in Illinois and $40 to $70 per year in Ohio.
How to get accident forgiveness for free
Not all companies charge for accident forgiveness. Some offer the option at no charge in exchange for loyalty to the insurer, including:
Erie: If you have a good driving record and have been a customer for three years, Erie automatically forgives your first accident.
Progressive forgives small accidents (less than $500 in damage) automatically for customers in its loyalty program. (Enrollment is automatic in states where it’s available.) After five years with the company, Progressive forgives the first accident with damage over $500 for customers in the program.
USAA will forgive an accident after you’ve been a customer for five years, in some states. USAA is available only to military members, veterans and their immediate families. In some states, members can also purchase accident forgiveness from USAA.
Is accident forgiveness worth an extra cost?
The average national premium increase for drivers who cause an accident is $446 per year, according to a NerdWallet analysis. Typically, accident surcharges last three to five years.
The total cost of accident forgiveness can add up to more than the average surcharge if you pay for it for more than about 14 years (at the highest rate we found) without causing a crash.
Each insurer’s rates are set differently, so some charge more after an accident than others. To get a good deal, no matter what’s on your record, it’s crucial to compare car insurance quotes.