What is Accident Forgiveness Coverage?

Accident forgiveness is a car insurance benefit that keeps your first qualifying at-fault accident from causing your premiums to go up.

It doesn’t remove the accident from your driving record or claims history. It’s just an agreement with the insurance company that they will not factor that qualifying accident into your premium when your policy renews.

Accident forgiveness protects you from rate hikes after your first at-fault crash. Normally, an accident would increase your premium, but this benefit automatically waives that price increase at your next renewal.

The benefit usually covers only your first accident, and exact rules vary by state and insurer. The accident will also still appear on your motor vehicle record and your claims history.

You generally must have the benefit in place before a crash. You can’t add it after an at-fault accident to erase a rate increase you’ve already received.

Accident forgiveness covers the price jump that usually follows an at-fault accident. Your insurance company agrees not to count that specific crash against you when calculating your rate at renewal. 

Many insurers exclude serious incidents, such as those involving driving under the influence.

Depending on the company, accident forgiveness may also protect a safe-driver discount you’ve earned, though some carriers may still drop certain discounts after a claim.

Some insurers forgive one accident per policy, while others forgive one per driver. This is an important consideration if you have multiple drivers in your household.

What accident forgiveness does not do:

•    It doesn’t “erase the accident.” The crash stays on your driving record and claims history for years. If you change insurers, your new insurer can still count it.

•    It doesn’t transfer between insurers. The benefit applies only to your current insurer and does not extend to other companies if you switch.

•    It doesn’t cover your deductible. You must still pay your collision or comprehensive deductible when you file your claim. 

•    It doesn’t stop all increases. Your rate can still rise at renewal for reasons unrelated to the forgiven accident, such as a statewide rate increase, adding a driver or vehicle, moving, losing another discount, changes in your credit (in states that allow it), or rising repair costs.

Insurers apply the accident forgiveness benefit in one of three ways: 

• Included automatically

• Earned after several years of clean driving

• Sold as an add-on before an accident occurs

Most insurers require a clean driving record before they will offer accident forgiveness. 

Typical requirements include three to five years with no at-fault accidents or major violations, and sometimes a minimum number of years as a customer.

Drivers under 21 may not qualify for the free, earned version even with a clean record.

If you don’t yet qualify for accident forgiveness as an automatic perk, ask whether you can buy it as an add-on, and confirm the exact requirement, since it varies by insurer and state. 

Eligibility depends not just on the policy owner. It can also depend on every driver named on the policy, so one driver’s record can affect whether the entire household qualifies. Depending on the insurer, you can exclude a driver from the policy to still take advantage of the benefit, but that driver won’t be covered when driving your car.

Accident forgiveness is available in most states, but availability depends on the insurer and whether you meet its requirements. Ask Lu to find out what insurers offer accident forgiveness in your area.

Some carriers will extend the benefit for free to established customers with good driving records at no additional cost.

If you purchase accident forgiveness as an endorsement, you will pay an additional premium. In this case, the cost varies by insurer, state, driving record, vehicle, and the named drivers on the policy.

Ask for the exact annual charge before adding it, and confirm whether the charge is removed after you use it.

If you pay a premium for the accident forgiveness endorsement, the benefit can pay for itself after a single at-fault accident. 

At-fault accidents generally mean higher premiums, and because an accident rate increase typically lasts three to five years, avoiding even one can potentially save you many times the cost of the benefit.¹

Here’s a look at how much an at-fault accident can raise your rates without accident forgiveness:

Accident forgiveness may make especially good sense if a higher-risk driver, such as a teenager, shares your policy.

Many major insurers offer accident forgiveness in select states, but the rules and terms vary widely by carrier.

Here is a breakdown of how the benefit works across several top insurance companies:

Accident forgiveness is worth it when it’s free, and worth a closer look even if you need to pay for it. However, if your insurer includes the earned benefit at no charge, there’s little reason to decline it.

Luva research shows that, nationally, almost 14% of auto insurance applicants report an accident on their record.²

The accident forgiveness endorsement may be worth purchasing if you live in a high-traffic area, drive a lot of miles, or if someone in your household is a new driver or otherwise a higher-risk driver.

If you do have an excellent driving record, consider shopping around. Other carriers may offer accident protection to you at no charge, or otherwise charge a much lower premium for similar coverage. Use Luva to get multiple quotes, with or without accident forgiveness, as applicable, so you can do a side-by-side comparison.