One at-fault car accident can cause a dramatic increase in your car insurance rates. Your annual premiums could rise by more than 100 percent in some cases. Your rates could rise even more if you have a history of at-fault accidents.
What if your first accident was forgiven? Imagine if your insurance company agreed to lower your rates or keep them at the same level after you report the accident to them. Many auto insurance companies will offer this option, which is something that many consumers don’t know. This is called “accident forgiveness”. We’ll show you how it works and what options are available to you as a policyholder. We’ll also explain what to do if you cause another collision.
After an Accident, How to “Forgiveness”
To determine the likelihood of an auto insurer extending coverage to a driver, they use a star rating system. A driver with six stars is considered safe. A rating of three stars is considered less safe. Your rating will drop the more you have a poor driving record.
A single accident can cause your star rating drop without the benefit of accident forgiveness. If you have a six-star rating and are involved in a major accident, it is possible for your star rating to drop to two or three stars. This number is used by many insurance companies to calculate their rates, so you can expect premiums to go up dramatically.
Accident forgiveness is a feature of car insurance policies that includes accident forgiveness. This will not have the same impact on your star rating and premiums. Your rating might drop to five stars or four stars if your insurer follows the example above. Therefore, rate increases will be smaller.
Insurance companies won’t extend this benefit to anyone but the most safe drivers. Your insurer will not “forgive” you if there is an at-fault accident on your driving record.
A Free Feature Versus a For-Fee Endorsement
Every insurance company handles accident forgiveness differently. Some insurance companies will automatically add this feature to your policy, assuming that your driving record has been clean. Others will let you purchase the option as an endorsement or rider; still others won’t offer the provision, even though your driving record is perfect.
This feature can be added to your policy automatically and is typically extended in one or both of the following ways. Your insurer will forgive you partially or completely for an accident. Your star rating will remain the exact same and your premiums won’t increase in the first case. The latter will cause a decrease in your star rating by one or two stars. This will lead to a rate rise. However, the rate increase will be much less than if you didn’t endorse. In both cases, you may lose your “good driver” discount.
Accident forgiveness can be purchased as an optional option. Your insurer will completely forgive any at-fault collision. You can also pay more to keep your good driver discount or any other discount.
What to Expect After a Second (or Third) Accident Accident
It’s tempting for an insurance company to forgive one at-fault accident and then make the same mistake again. Your insurer will likely treat a second accident the same way they would a first one, without accident forgiveness. Your star rating will likely plummet and your rates will likely rise substantially.
This is because the first accident you were involved in will remain on your driving record. Your insurance company will not erase it. Your premiums will skyrocket if you have a second collision. Although policies will allow multiple collisions to be forgiven, the rates associated with them are often very high.
Comparison Shopping Auto Insurance
Like most aspects of car insurance, the amount that you can expect to pay for accidents forgiveness will differ from one insurer to another. Compare quotes from different companies to find the best deal. This feature may be able to be added to other coverages without an increase in your premiums.
