Accident forgiveness car insurance may seem like a great way to save money in difficult economic times, but if individuals are not careful they could find themselves paying more than they originally intended.
Auto insurance rates can rise up to 30 percent following an accident, whether or not the driver was at fault or had collision insurance on their policy.
What are the constraints of this policy?
Many companies offer this type of insurance to their members, but some require customers to have been loyal for several years and accident-free for a few years as well.
Free or complimentary?
Some insurance companies will charge an additional fee for drivers that want to add this feature to their policy. Drivers also need to remember accident forgiveness does not prevent rates from going up for other situations. Many policies will increase after a driver gets a speeding ticket, regardless of what type of forgiveness they have.
Progressive
Progressive requires members to have been with the company for four years and accident free for three before they allow car insurance quotes to include accident forgiveness. They do not charge any additional amount to their customers for this service, but it only applies to the first accident.
Nationwide
Nationwide also offers accident forgiveness programs. The company does not raise rates for customers following their first at-fault accident and even offers accident forgiveness to teenage drivers on their parent’s policies.
Switching Car Insurance Companies
Another issue can present itself if the driver changes insurance companies. Not all companies offer accident forgiveness and accidents are a matter of public safety. A record of any such incident is kept on file and insurance companies will be notified.
Another problem with causing an accident, or being in one, is that it can cause drivers to lose other discounts they currently enjoy. Many companies give people reduced rates as long as they keep a clean record and even if they accident is forgiven they may still lose those additional savings.
While there may be drawbacks to this type of coverage, any way to keep insurance rates low after an accident may be seen as a bonus.