What Is Accident Forgiveness?

What Is Accident Forgiveness?

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Accident forgiveness is an insurance feature that protects drivers from drastic rate hikes in the event of an accident. You can often add this feature as an optional rider to your car insurance policy. Accident forgiveness is sometimes offered for free, when you've held an auto insurance policy for a certain number of years and remained accident-free.

What is accident forgiveness?

When determining your rates, insurance companies consider many factors including your age, vehicle and location. A top factor is your driving history. Experienced drivers with clean driving records can qualify for substantial discounts and low annual rates. But a driver that causes an accident could simultaneously lose such discounts and incur an accident surcharge. Our research shows that average drivers who cause an accident may see an increase of about 33% for several years.

For example, say you have an accident-free discount and pay $1,000 per year for car insurance. If you cause an accident, you would lose the discount, and your rates may automatically go up when you renew your policy. Additionally, your insurance company could apply an accident surcharge to your rates, raising them to $1,333 for the next three to five year —typically until your state drops it from your driving record. On top of the expenses of the accident itself, your collision could cost you an additional $1,665.

However, if you had accident forgiveness as a feature of your car insurance policy, part of this rate increase could be avoided. While you would still lose the accident-free discount, your insurer would not apply an additional penalty to your rate for the recent accident on your driving record.

Even if you have accident forgiveness, any accidents you cause will still be recorded on your driving record. This is important because if you switch to a different car insurance company within a few years of the collision, that accident may negatively impact your rates. Furthermore, accident forgiveness benefits usually only apply to one at-fault accident. After your accident forgiveness has been used, subsequent accidents may increase your premiums.

A notable exception to this rule is if your insurance company offers an upgraded form of accident forgiveness that covers multiple accidents. For example, if you buy Allstate's platinum accident forgiveness benefit, you may have up to three accidents forgiven before your rates are affected.

How do I qualify for accident forgiveness?

The qualifications for accident forgiveness vary by insurance company and location, but most insurers require you to maintain several years of accident-free driving before adding accident forgiveness to your policy. Accident forgiveness is not offered by every insurance company and is not necessarily available in every state. Some companies allow you to earn accident forgiveness for free by maintaining a clean driving record. Other insurers allow you to purchase it or offer enhanced accident forgiveness as an upgrade to the base benefit.

Here are the accident forgiveness requirements for some major auto insurance companies.

CompanyRequirementsAvailability
AllstateAccident-free for three to five years. Can purchase Gold (one accident) or Platinum (three accidents) accident forgiveness, which takes effect immediately.Not in every state
Farmers InsuranceAvailable for purchase after three years with no accidents.In all states
GEICOAccident-free for five years, and in some states, you must be over the age of 21. Can be earned or purchased.Not in CA, CT or MA
Liberty MutualAccident-free for five years with any insurance companyNot in CA
NationwideAvailable for purchase. Extends to other drivers on your policy, but only one accident will be forgiven per policy.Not in every state
ProgressiveAccidents that cost under $500 will be forgiven. More substantial accident forgiveness may be obtained if you have been with Progressive for five years and maintain a clean driving record.Not in every state
TravelersPart of the Responsible Driver Plan." Includes one forgiven accident and one forgiven traffic violation per three years of clean driving.Not in every state
Erie InsuranceFirst Accident Forgiveness is available for free after three years of clean driving with Erie. After 15 years of accident-free driving with Erie, you qualify for Feature 15, which means you'll never see a surcharge for an at-fault accident again.Not in every state
State FarmAccident-free for nine years under a State Farm policy.Not in every state
USAAAccident-free for five years under a USAA policy, after which one accident may be forgiven every five years. You may upgrade to having one accident forgiven every three years.Not in CA or NC. CT and DE may be subject to different rules.

Other good driver benefits

In addition to accident forgiveness, insurance companies offer several other benefits for drivers with clean driving records.

  • Accident-Free Discount: Some insurance companies, such as State Farm, offer a discount in certain states for remaining accident-free for three years. This discount may increase over time with a clean driving record.
  • Vanishing Deductible: For every year without an at-fault accident, your insurance company may lower your deductible a specified amount. For example, the standard deductible for Allstate drivers is $500. However, for each year you drive without an accident, Allstate may reduce your deductible by $100. So, if you have an accident after three years of safe driving, your deductible may be only $200.
  • Good Driving Discount: Some insurance companies send you a check for a small portion of your policy's annual premium—typically 5%—after six months of driving without an incident.

Daniel is a former Staff Writer at ValuePenguin, covering insurance, retirement and other personal finance topics. He previously wrote about compliance and best practices for K-12 school districts at Frontline Education.

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