Is Accident Forgiveness Worth Buying?

Last Updated on November 3, 2020

When shopping for car insurance, you will likely see advertisements for accident forgiveness. These policies are touted as a way to keep your monthly premiums down even if you get in an accident, but are they worth spending your money on? Here’s everything you need to know about accident forgiveness and whether or not you should buy it.

How does accident forgiveness work?

Accident forgiveness works slightly differently depending on which insurance company you use, but the general principle is the same everywhere. Typically, if you get into an at-fault accident, your monthly insurance premiums will go up, often very drastically. When your insurance policy includes accident forgiveness, you won’t see your prices go up after an accident. However, there are some important caveats to note about this insurance perk. You have to qualify for it – not everyone has the option to add accident forgiveness to their insurance policy. Usually, to qualify, you need to have at least three years of a clean driving record, sometimes more. Accident forgiveness isn’t guaranteed, either – it will typically only apply to your first at-fault accident. If the accident is particularly severe, you may still see your premium prices affected. In most cases, you will have to pay for accident forgiveness as an add-on to your policy, although in some cases, your insurance company may offer it for free as a loyalty perk.

How much does accident forgiveness cost?

The cost of adding accident forgiveness to your policy varies drastically depending on which insurance carrier you have. For example, USAA advertises their accident forgiveness add-on as costing less than $1 per month. However, in most cases, it’s going to cost more than that if you purchase it on your own. A more realistic number to expect is that your insurance costs will go up around 5 percent. In some cases, you may get accident forgiveness for free as a loyalty perk.

Is accident forgiveness worth it?

Many people wonder if accident forgiveness is worth investing in. This depends entirely on your own budget and your own fears of getting in an accident as well. Think about it this way – when you are paying for accident forgiveness, you are essentially paying for a crash that hasn’t happened yet. If you go for several years without getting into an accident, you could end up spending hundreds of dollars on accident forgiveness without really seeing the benefits. It’s also imperative to note that accident forgiveness won’t necessarily save you money on car insurance after an accident. There are some at-fault accidents where you won’t even qualify, and it will only protect you from rate hikes after one accident. It’s also important to note that if you were receiving an additional discount on your premium for having a clean driving record, that would typically go away after an at-fault accident, so you’ll still end up paying more for your insurance.

If you’re interested in accident forgiveness and you think you may qualify for it, start by getting quotes for policies without accident forgiveness. This will give you a baseline price point to compare with. Then, get quotes for policies with the accident forgiveness added on to see what the difference is. Then, add that difference up over several years, and you will get a better idea of how much accident forgiveness will cost you in the long run. If you’re comfortable with spending that much money in the long run, then it may be worth it for you. However, for many people, it just doesn’t make sense to invest in accident forgiveness when you look at the numbers. It may make more sense to look into driver safety discounts if you have a clean record – this is a much more tangible way to save money. In New York state, you can take an easy driver’s safety course every few years to earn discounts on your car insurance. Many insurance companies also offer discounts if you already have a good driving record. You might also want to consider choosing an insurer that provides accident forgiveness as a free loyalty perk. Although it will take time before you qualify for it, you won’t end up spending money on it.

Car insurance companies will play into your sense of fear when advertising accident forgiveness policies. The thought of having your premiums go up so drastically after an accident can be very scary to think about, which makes accident forgiveness sound like a great idea. However, it’s important to try to think about it logically and see if the benefits are worth it in the long run. When shopping for the right car insurance policy, make sure to compare as many options as possible to find the choice that gives you the best value for money.