Is Accident Forgiveness Insurance Worth It?

Car insurance premiums usually increase after an at-fault accident. Depending on your insurance company, an at-fault accident can cause a rate increase of 26% or more, Insurify data shows. Even if you weren’t responsible for the accident, your rate could still go up when your policy renews.

Some of the best car insurance companies offer accident forgiveness to prevent drivers’ rates from increasing after an accident. This optional coverage waives your first at-fault accident so it doesn’t affect your premium. 

But you usually need a full-coverage auto insurance policy to get accident forgiveness. Comparing quotes from multiple insurance companies can help you find affordable coverage with accident forgiveness.

How does accident forgiveness work?

Accident forgiveness is an endorsement that waives your first at-fault collision so it doesn’t cause rate increases. Most major car insurance companies offer accident forgiveness, but it isn’t available everywhere.

Some insurance companies automatically include accident forgiveness when you purchase a full-coverage policy, while others offer it as an optional add-on. Some insurers require drivers to “earn” accident forgiveness based on their driving record.

Additionally, accident forgiveness has limitations. Most notably, accident forgiveness only applies to your first accident in a certain period. If you cause more accidents, your rate will probably increase. Also, most insurance companies will only waive an accident when the total damages are less than a certain monetary threshold.

For example, Progressive offers small accident forgiveness, which waives an at-fault accident under $500. You can also purchase large accident forgiveness, which waives at-fault accidents that exceed $500 in damages.

How much do car insurance rates increase after an accident?

In most cases, car insurance premiums increase for three to five years after an accident. However, the increase depends on several factors, including your state, your insurance company, fault, and the crash’s severity.1

After an accident that you cause, car insurance premiums increase 26%, on average. If you weren’t responsible for the crash, your rate can still increase by roughly 10%, according to Insurify’s proprietary data.

The severity of the crash is another factor that can affect your rate. For example, if you cause an accident with a significant amount of damage, you can expect a greater rate increase compared to a minor fender bender.

How much does accident forgiveness cost?

If your car insurance company offers accident forgiveness as an optional endorsement, adding this coverage will likely cause your rate to increase. However, the exact amount depends on your insurance company and personal factors like your vehicle, location, credit history, and more.

For most drivers, accident forgiveness coverage is a good value. It won’t raise your annual premium significantly, and it’ll help you save money after an accident. The rate increase after an accident is likely much higher than the annual cost of accident forgiveness.

Cost of getting into an accident without it

Because car insurance premiums increase by about 26% after an at-fault accident, accident forgiveness can be worth it for drivers concerned about excessive rate increases. Additionally, accident forgiveness can provide peace of mind. If you get into an accident, you can rest assured that your rate won’t increase, even if you were responsible.

Here’s how much insurance companies’ annual car insurance rates increase after an accident.

How to qualify for accident forgiveness

Most insurance companies have eligibility requirements for accident forgiveness. To qualify, most insurance companies require drivers to have a clean driving record for the past three to five years. If you have any recent moving violations, tickets, or accidents on your record, you may not qualify for accident forgiveness right away.

Also, some insurers don’t offer accident forgiveness to people younger than a certain age, which can vary by company.

For example, Liberty Mutual says that drivers must have no collisions in the past five years to qualify for accident forgiveness, regardless of their insurer. Drivers must also have no violations in the last five years, and drivers younger than 25 must have five consecutive years of a clean driving history.2

Progressive offers “large accident forgiveness” to drivers who are part of the Loyalty Rewards program. To get this coverage, drivers must have Progressive car insurance for at least five years and have no accidents or violations for up to five consecutive years.3

Is accident forgiveness worth it?

Accident forgiveness is worth it for many drivers, but it may not be as beneficial for everyone. Before purchasing accident forgiveness, you should consider your own driving history and the likelihood of getting into an accident.

While the cost of accident forgiveness depends on your car insurance company, the cost is typically less than the rate increase you would face after an accident and can save you money in the long run.

However, accident forgiveness isn’t worth it for everyone. If you don’t drive very often, you might not need this coverage. Also, if you have a bad driving record, you probably won’t qualify for accident forgiveness until those incidents fall off your record.