Tyron Jones

Car Insurance Expert
Updated: 1/2019

Tyron Jones is a car insurance expert who has operated within the auto insurance business for more than 10 years. 

Millions of individuals are looking for the best deal possible on their car insurance. They want to make sure that they are receiving the most coverage for the lowest cost. Individuals also want to make sure that their insurance costs increase as little as possible if they have an accident. Accident forgiveness has become a new consideration for these insurance shoppers. This relatively new concept allows individuals to preserve their old pay rates even after an accident. There are sometimes trade-offs and stipulations that individuals must endure before taking advantage of this concept. But it may also be able to save individuals a considerable amount of money and stress if they ever do have an accident.

Car accidents

Car accidents are a serious concern for millions of Americans. They can be a threat to human life and limb. Accidents occur because of the random nature of millions of cars driving extremely fast exceptionally close to each other. There is a significant chance that an individual will become involved in an accident. Millions of drivers talk and text on their cell phones while driving. They may fail to stop in time or go too fast on the interstate.

There is a litany of reasons why individuals may become involved in accidents that are not even connected to their own wrongdoing. As a result, individuals often drive and buy cars with accidents in mind. Individuals make their car-buying decisions in many cases on crash test results. These tests help to show what cars are safer and what cars will cost the least amount of money to repair after an accident. They also buy car insurance purely because of this chance. Car insurance is required at least for the liability that can be done to other cars on the road.

The downsides of an accident

Perhaps the most important insurance downside of an accident is connected to the actuarial table. The actuarial table considers the chances that an individual will get into an accident and cost the insurance company money. To insurance companies, the clearest sign that an individual is about to have an accident is a recent accident that they have had. A recent accident may signal that an individual has issues with timing, sight, or decision-making.

It may simply show that they are an individual whom the company will have to pay more money for to keep insured. Therefore, one of the unfortunate consequences of an already-stressful car accident is the fact that insurance premiums and deductibles shoot up. These premiums will increase for a time and then slowly begin to decrease as an individual maintains a clean driving record.

The increase is sometimes connected to the nature and circumstances of the accident. Accidents that are caused by an individual’s recklessness will often cost more in insurance over time. Some accidents, such as those caused by drunk driving, can result in a massive increase and may even result in an insurance company dropping an individual from a plan.

What is Accident Forgiveness and Who Offers it?

Accident forgiveness

Many users have complained about the potential of an accident to ruin the prospects that an individual might have to pay affordable insurance. They have complained about the potential for even the smallest accidents to severely increase a monthly premium. As a result, the insurance industry has started to offer accident forgiveness programs.

These programs are based on the competitive nature of the car insurance market. There are a number of different companies that provide basically the same product. Some of these companies, such as USAA and Amica, have excelled on tests in recent years that determine what companies have the best products and customer service. Other companies have been feeling pressure to curb the most problematic parts of their plans and emphasize the parts that individuals enjoy. One of these problematic aspects is the increase in insurance payments after an accident. Companies believe that they can offer accident forgiveness and lure in individuals away from competitors that may still harm their customers by charging a massive amount of money once an individual gets into an accident.

Who offers it?

A number of different insurance companies offer accident forgiveness to new and longtime customers. One of the most popular of these companies is Allstate. Allstate’s accident forgiveness program ensures that an individual’s premium and deductible does not increase after the first accident that an individual has. This service is a feature that is only available for individuals who meet certain criteria. They must already have a clean driving record that has persisted for five years.

Individuals who go five years with a clean driving record can then retain their older rates for an extended period of time. The time period without an accident is one major disadvantage to the Allstate plan. Another disadvantage is the fact that Allstate’s accident forgiveness program does not apply to all forms of insurance. Individuals have to upgrade to a Gold or Platinum insurance plan to take advantage of accident forgiveness perks.

Another company that offers accident forgiveness is Liberty Mutual. Liberty Mutual is a longstanding insurance company with its headquarters in New York City. It has a number of mid-range insurance policies that offer accident forgiveness. Liberty Mutual’s accident forgiveness policy begins after a previous period of good driving without an accident. It is a policy that only goes into effect after five years of good driving.

A third company that offers accident forgiveness is USAA. USAA is one of the highest rated insurance companies in the United States. It does offer accident forgiveness on a wide variety of policies. But there are a number of different hurdles that an individual must meet in order to qualify for one of those policies. In order to even become a USAA member, an individual has to be associated to a certain degree with the United States Armed Forces. They usually have to have a spouse or an immediate family member in one of the service branches. If they do, they can enjoy both accident forgiveness and some of the most highly-rated customer service in the entire insurance industry.

But an individual also has to maintain a clean driving record in order to qualify. This term does not only apply to accidents. Clean driving records in the insurance world also refer to both avoiding accidents and also moving violations. Insurance companies sometimes increase premiums on moving violations as well as accidents. Moving violations show that an individual is driving recklessly and may be more prone to getting into an accident that would increase their car insurance rates. As a result, they often factor into many decisions that are often made surrounding a potential accident forgiveness plan.

What to do

The first step that anyone should take when offered accident forgiveness is to closely scrutinize the terms of the contract. They should view any other offers associated with accident forgiveness that they might have as well. In addition, they should ask and analyze how an insurance company usually responds when an individual gets into an accident. Accident forgiveness often does not occur purely as its own incentive for an insurance policy.

Companies do not voluntarily take on greater actuarial risk for their clients. Instead, there is often a trade-off inherent in these plans. Individuals may simply pay a smaller amount with an accident forgiveness plan than they would with their competitors. Some companies offer accident forgiveness along with a much higher deductible or premium than the competition. Other companies allow accident forgiveness for the first accident and then massively increase all costs for the second accident that an individual may have.

There are also certain special circumstances that apply when an individual may be able to entirely avoid an increase in payments from an accident. The most common of these special circumstances is a new teenage driver. New teenage drivers are the most likely drivers to be involved in moving violations and accidents. As a result, bringing these individuals onto an insurance plan causes the costs associated with that plan to skyrocket. The insurance company wants to cover for any potential accident that the teenager is engaged in.

As a result, the possibility of an accident is often priced in. The premiums and deductible may not even increase after an accident. Such a circumstance means that it would be a waste of money to pay for an accident forgiveness plan. This information is why individuals need to be in close contact with their insurance company. They need to contact their insurance representative after each change in a plan’s payments.

Conclusion

Accident forgiveness is a now-familiar type of incentive offered by insurance companies. It may be helpful to provide peace of mind to anyone who is worried about a single accident greatly increasing their insurance rates. But individuals should not always embrace any accident forgiveness program that they find. Individuals need to make phone calls and do their research on any insurance plan before applying. If they do not, they could find themselves spending a considerable amount of money even with an added-on accident forgiveness plan.