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Do You Have an Accident Forgiveness Option in Your Auto Policy?

You probably know what an at-fault accident can do to your auto insurance premium, even if it is a small one.  Depending on the insurance company, and the driver's age as well as driving history the premium hike can vary significantly.

It used to be a few auto insurance companies offering 'Accident Forgiveness' program in the past, but now almost all major insurance companies have it and use it for their marketing promotion as well.  However, not all the programs are created equal, and programs by some insurance companies are nothing more than marketing gimmick.

What It Is

Insurance companies look at your record of accidents and moving violations when developing your automobile insurance premium. With accident forgiveness feature, the insurance company agrees not to factor an accident into the calculation of your premiums. Some insurance companies also use accident forgiveness as an incentive to new customers for switching from another insurer. Other insurers may even extend the accident forgiveness option to parents of teenage drivers.

Corporations in a free world have a tendency to name products and services to mean more than what it actually is.  While an accident forgiveness option may sound like what it literally says, it is not always the case, and you really do need to understand the conditions and limitations associated with the program with your insurance carrier.

Do You Need It?

According to Consumer Reports, in its "Money Adviser" issue last year, said the add-on is worth considering for some people. "If you're a safe driver with a clean record and pay standard rates, a traditional policy may cost you less," the magazine noted, then added, "If you're already paying more because of accidents or violations, a forgiveness policy may make sense, assuming you're eligible for one.

"And if you have teenage drivers in your household, you may already be paying higher rates to account for the added risk. So even without accident forgiveness, your rates might not go up after your child's first fender bender ... [in the end, be sure to] shop around."

The Insurance Information Institute does not provide an opinion on this topic, but does call for consumer awareness on the such a program:
"In our view, the policyholder needs to quiz either their insurance agent or insurance company representative about the pros/cons of accident forgiveness" before buying the provision, he says. "Education, knowing what you have and what you need, is always a great idea."

Do You Have an Accident Forgiveness Option in Your Auto Policy? Reviewed by Blogs on 2:16 PM Rating: 5

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