If you cause the accident, it can be expensive for years to come because car insurance rates will usually increase at renewal time following an at-fault accident.

Our analysis found:

  • The national average auto insurance rate increase for an at-fault accident with property damage is 38%.
  • The average rate hike is 40% if you cause an accident with injuries.

To help you avoid this increase, some insurers offer accident forgiveness coverage—but if you’re a very good driver, adding this option may not be worth it.

 

What Is Accident Forgiveness Insurance?

If you’re in an accident and you are found to be at fault, there’s a good chance your auto insurance premiums will rise. Your driving record is a big factor in determining car insurance costs, so causing an accident usually means a rate increase when you renew the policy or shop for a new one.

Accident forgiveness coverage helps policyholders keep their rates down. Some insurance companies add this coverage automatically, while others offer it as an add-on coverage option (that you pay for) or a combination of both.

Here are some key things to consider about accident forgiveness:

  • Accident forgiveness isn’t offered by every insurance company. Also, some states such as California don’t allow accident forgiveness.
  • There are limitations for accident forgiveness. Usually, accident forgiveness only applies to one accident per policy, not per driver on the policy. For example, Farmers Insurance forgives one at-fault accident for every three years you drive without an accident.
  • Your accident will stay on your driving record, even if it’s “forgiven” by your insurance company. Since other insurance companies can see your driving record, your accident can impact your future rates if you decide to switch insurers, too.

What Is a “Chargeable Accident”?

A “chargeable” accident is one in which the insurance company has determined you were at fault in some way. Your accident may be chargeable if you’re more than 50% at fault. Chargeable accidents also include:

  • Damage you cause to another person’s property.
  • A crash that causes injury or death.

A chargeable accident can be as simple as a fender bender or as serious as totaling someone’s car. Usually, when an insurance company decides an accident is chargeable, it adds a surcharge to your premium. A surcharge is an increase in the cost of your policy.

Some states also define a chargeable accident in terms of a dollar amount, such as:

  • In Massachusetts, you may see an insurance surcharge if the accident involves a claim payment of over $1,000 for damage to someone else’s property, a collision or bodily injury to others (for accidents where the operator is more than 50% at fault and driving a private passenger vehicle).
  • In Minnesota, an accident is chargeable when the insurer pays more than $500 under bodily injury liability, collision or property damage liability coverage.
  • In New York, you can receive a surcharge if you’re found at fault for an auto accident involving losses of property or injury over $2,000.

Unfortunately, a chargeable accident can follow you around for a while. Some insurance companies gradually decrease your surcharge every year you go without an accident. In many states, your surcharge can be lowered gradually over three years until it disappears completely as long as you’re accident-free.

It’s important to note that not every type of accident will make your insurance go up. Here are some examples of accidents that typically won’t result in a surcharge:

  • Your car was parked and hit by another vehicle.
  • Your car was struck in the rear and you were not convicted of a moving traffic violation in connection with the accident.
  • You were struck by a hit-and-run driver.
  • The other driver was convicted of the moving violation but you were not.
  • The accident involved contact with an animal.
  • The accident resulted in physical damage, limited to and caused by flying gravel, missiles or falling objects.
  • Defective tires caused the accident.
  • The accident occurred while in pursuit of official duties as a law enforcement officer or emergency vehicles.

Accident Forgiveness Insurance Rules

Even if your car insurance company offers accident forgiveness coverage, not everyone qualifies and some accidents won’t be eligible for forgiveness. Here are a few examples of common requirements and exclusions you should be aware of:

Clean driving record. Typically, insurers require you  to have a clean driving record to qualify for accident forgiveness. For example, to qualify for the Farmers Flex from Farmers Insurance, all drivers on the policy over age 25 must have no chargeable at‐fault accidents, no more than one minor or speeding citation and no DUIs. Drivers under age 25 must have no traffic violations or citations of any kind.

One accident per policy. Accident forgiveness is not an unlimited pass. Usually it allows forgiveness for only one at-fault accident per policy, even if you have multiple drivers on the policy.

Is Accident Forgiveness Insurance Worth it?

Accident forgiveness may be worth it, especially if you have high-risk drivers in your household.

Our analysis of the national average annual cost of accident forgiveness from some large companies finds it’s usually pretty affordable.

The yearly cost for accident forgiveness varies from $15 to $60, based on our analysis.

We compared the annual cost of accident forgiveness to the price of coverage without it and how much more you’d pay with an accident on your record. After crunching the numbers, we found accident forgiveness is worth the extra cost.

For example:

  • You’d pay an amount equal to eight years of accident forgiveness with USAA car insurance to equal the $472 USAA rate hike from an accident. And remember that increase would continue for three to five years normally, so paying $60 a year to combat a hike is worth it.
  • You’d pay what is equal to 61 years of accident forgiveness costs with Nationwide car insurance to equal the over $900 rate increase for one at-fault accident with injury. Thus, accident forgiveness with Nationwide is quite the bargain.

Related: Does Car Insurance Cover a Hit-And-Run?

Cost of Accident Forgiveness Coverage vs. Rate Increase Without It

Company Annual cost of accident forgiveness Average annual rate increase after accident with injuries Years of accident forgiveness to equal increase of rates

Auto-Owners

$21 $574 27
Farmers $52 $925 18
Nationwide $15 $918 61

Travelers

$21 $565 27

USAA

$60 $472 8

Rates vary for accident forgiveness by company and state, so get a quote to see if it makes financial sense to add it to your policy.

 

Insurance Companies That Offer Accident Forgiveness

It’s important to note that each insurance company has varying features and requirements for their accident forgiveness coverage. Companies that offer accident forgiveness include:

  • Allstate offers the optional coverage of accident forgiveness. The eligibility rules vary, but generally, you must have been accident-free for three to five years.
  • American Family has accident forgiveness you can purchase or can earn. You can buy the coverage at the start of your policy or at renewal time as long as household drivers haven’t had at-fault accidents or driving violations in the last 12 months and no more than one at-fault accident in the last three years. You can earn American Family accident forgiveness by having no claims for five years and no major violations on your record.
  • Auto-Owners offers this benefit for purchase if drivers on your policy have been without at-fault claims or major violations for the preceding 36-month period.
  • Erie offers “first accident forgiveness” after you’ve been a customer of Erie for at least three years.
  • Farmers forgives one at-fault accident for every three years you drive without having an accident.
  • Geico allows policyholders to receive accident forgiveness for free either by maintaining a clean driving record or by purchasing coverage as an upgrade to an auto insurance policy. To receive this coverage for free, drivers must be accident-free for five years. Drivers who are under age 21 might not be eligible.
  • Liberty Mutual offers accident forgiveness as additional coverage. To qualify, drivers must have no accidents or traffic violations within the last five years. Drivers under age 25 must have five years of a completely clean driving record before they qualify.
  • Nationwide offers accident forgiveness coverage as an add-on to an auto insurance policy. Like many other accident forgiveness policies, Nationwide forgives your first at-fault auto accident or a minor violation that would normally get a surcharge.
  • Progressive customers can receive “small accident forgiveness” (rates don’t increase for claims less than $500) and “large accident forgiveness” for free through the Progressive Loyalty Rewards program. For large accident forgiveness, you must be a Progressive customer for at least five years and accident-free for three straight years. You can also buy accident forgiveness coverage that allows one accident forgiven per policy period. So if you combine the free and paid coverages you could have more than one accident forgiven during the same policy period.
  • The Hartford provides accident forgiveness if all drivers on your policy have been free of accidents and moving violations for the last five years.
  • Travelers offers a Responsible Driver Plan that includes accident forgiveness coverage and minor violation forgiveness. This plan forgives one minor violation and one accident every three years.
  • USAA provides this optional coverage for free after five years if your household drivers have been free of at-fault accidents.

Related: Best Car Insurance Companies

Alternatives to Accident Forgiveness for Good Drivers

For some, accident forgiveness coverage may not be an option. For example, we analyzed a Farmers policy that says you can’t qualify if there are any drivers in the household under age 21 with less than  three years of driving experience.

Good Driver Discounts

If you don’t qualify for accident forgiveness, you may be able to find other car insurance discounts for safe drivers. For example, with Geico’s Five-Year Accident-Free Good Driver discount, drivers with a clean five-year driving record are eligible for up to 22% off on most coverage types.

Vanishing Deductibles

Another potential savings is a vanishing deductible. This is usually an optional feature that rewards safe drivers by reducing their deductible amount for claims as long they have continuous safe driving.

For example, drivers who purchase a Premier Responsible Driver Plan from Travelers insurance receive a Decreasing Deductible which gives them a $50 credit toward their deductibles for every six months they are accident-free (up to $500).

If you don’t qualify for accident forgiveness coverage or don’t want to pay extra to add it on to your policy, check with your insurer to find out what other discounts and coverage options are available.

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Accident Forgiveness Insurance Frequently Asked Questions

Do you pay extra for accident forgiveness?

You’ll typically have to pay extra for accident forgiveness. Some car insurance companies offer accident forgiveness as a free perk to qualified drivers with good records. For example, Geico offers free accident forgiveness to drivers who have been accident-free for five years.

Can I buy accident forgiveness after an accident?

You can’t buy forgiveness for an accident that has already happened. And if you recently caused an accident, you won’t be eligible to buy forgiveness. If your rates spike upward with your insurer after an accident, compare car insurance quotes to see if another car insurance company will offer more affordable rates.

How long does an accident stay on your record?

The length of time an accident stays on your driving record depends on your state, but a surcharge typically affects your car insurance rates for three to five years.

For example, states like New Jersey, New York and Texas allow insurance companies to surcharge only for accidents in the previous three years. Other states, like Massachusetts, allow insurance companies to surcharge for accidents in the previous five years.