Allstate Accident Forgiveness Cost
Accident forgiveness is an additional coverage that you may add to your auto insurance policy to ensure that your rates won’t go up after you’ve been involved in an accident for the first time.
You probably already know this if you’ve ever been involved in a car accident, but after a collision, insurance premiums typically go up by a significant amount. Your insurance costs could increase by 20% to 50% if you file a claim for an accident.
Having accident forgiveness built into your auto insurance policy is one strategy to keep your rates from skyrocketing after a collision.
Accident forgiveness is an optional form of additional coverage that, if added to your policy, prevents subsequent increases in your insurance premiums in the event of subsequent accidents.
While some insurance companies will provide this protection at no additional cost, others may ask that you pay a premium for it. However, in order to add this coverage to your insurance, the majority of insurers require three to five years of driving history during which you have not been involved in an accident.
The purpose of this article is to provide you with an overview of accident forgiveness, including how it operates, how much it costs, and other information that will assist you in determining whether or not accident forgiveness is appropriate for you.
- If you’re in a minor accident and the claim amount barely exceeds your deductible, then it’s better to pay out of pocket.
- If you do make a claim, your premiums can go up in three ways: you could pay an accident surcharge, your base rates might rise or the discounts that reduce your premium may disappear.
- Accident forgiveness is offered by some car insurance companies and means your rates should not rise due to your first accident
- To obtain accident forgiveness as a perk on your policy, most insurers require an accident-free record for at least a couple of years but may be up to five. This offering may be free or require you to upgrade to a premium policy.
- Even without accident forgiveness, some auto insurance providers may waive surcharges for your first accident and those with minor damages.
What is accident forgiveness?
According to research provided by Insurance.com, a driver’s auto insurance premiums will increase by approximately thirty percent (or more) after being responsible for an accident that causes more than two thousand dollars in damages. However, if your insurance includes accident forgiveness, you won’t have to be concerned about the premium rise that would be applied.
In order to be eligible for this kind of coverage, you will typically need to satisfy certain requirements, which can change from insurer to insurer. To be eligible for auto insurance from Liberty Mutual, for instance, a driver must demonstrate that they have gone five years without being involved in an auto accident.
Is accident forgiveness worth it?
There is no universal answer to this question. It depends on your household and the people who drive your vehicles. If you have an accident-prone driver in your home (think teenager or young driver) it may make sense to add accident forgiveness to your policy.
While it varies dramatically by insurer, accident forgiveness will typically add $20 to $60 to your annual insurance bill. On the other hand, an at-fault accident will push up your rates by 20% to 50% depending on your insurance company. In many cases, the cost of accident forgiveness may be well worth the cost.
It’s important to remember that even if your rates don’t go with accident forgiveness, you’ll most likely lose any good driver or claim-free discount that has been applied to your account.
What are the different types of accident forgiveness?
Accident forgiveness can take a few different forms. It can be an earned benefit or something that requires an additional premium. Here are the most common types of accident forgiveness:
- Paid add-on to your policy: Some insurance companies — Nationwide is one example — offer accident forgiveness as an add-on to your policy, which means you have to pay for it. The cost will vary by insurance company but will often be between 2% and 10% of your premium.
- Customer perk: Other insurance companies will offer accident forgiveness at no additional cost to long-term customers who have not had an accident in years. The requirements will vary by insurer. Some carriers want you to be accident-free for at least three years. Other insurers require five years of accident-free driving.
- Hybrid: Some insurers offer a paid accident forgiveness add-on that eventually becomes free once you pass a certain threshold (typically three to five years) of accident-free driving.
How does accident forgiveness work?
When you are in an accident, it’s almost a given that your insurance will increase. In general, minor fender-benders are surcharged the same regardless of whether you do $200 or $2,000 worth of damage.
Based on a 2021 Insurance.com report that looked at full-coverage quotes from three major carriers for a single, 40-year-old woman in Ashland, Ohio, driving a 2013 Buick Lacrosse, rates rise as much for a $100 claim as they do for much larger ones at some companies:
|Claim Discount||Carrier 1||Carrier 2||Carrier 3|
|$0 to $100||$1,088||$1,537||$1,658|
|$10,000 or more||$1,568||$1,537||$1,658|
If you have accident forgiveness included in your insurance coverage, then your insurance provider will not raise your premiums as a result of the accident. Even while your rates will not go up as a result of the accident, it is quite likely that any safe driver discounts that have been applied to your policy will be removed, which will result in a marginal increase in the total cost of your insurance.
Do insurance costs go up after an accident claim?
In most cases, yes. Filing a claim for an at-fault accident means you’re a higher risk to the company and are costing it money. The insurer will raise rates to recover the cost.
Shopping your coverage after an accident is always a good idea to see if you can save some money by switching insurers. There are several tools you can use, such as Insurance.com’s online quote comparison tool.
What to do if you are in an accident?
Should you find yourself in the unfortunate position of being involved in an accident, there are a few things you need to think about before filing a claim. Before you get on the phone with your insurance company, here is a quick rundown of some things to keep in mind:
Should you make an insurance claim following an accident, your premiums will increase: Pay the balance out of pocket if the accident was quite minor and the amount claimed is just barely higher than your deductible. If you file a claim, you won’t save too much money, and if your rates go up (which they probably will for the next three years), you’ll be the one who comes out on the losing end of the agreement.
When does a size become unacceptable? If you have the financial means to do so, industry specialists recommend paying cash for any purchase that is less than $2,000. When you reach the threshold of $2,000, you should consider submitting a claim. Be warned, though, that unless you have accident forgiveness, your rates will be going up in the near future.
After filing a claim with your insurance company, your premiums will go up: After you have filed a claim against your insurance coverage, your premiums will go up. This is especially important to keep in mind if the collision was your fault. Your insurance provider is the only one who can tell you how much your rates will increase when they raise them. Once a claim has been made on the policy, each of them uses a different set of proprietary algorithms to calculate an additional premium. After you cause an accident, you can anticipate a rise in your premiums of between 20 and 50 percent.
After being involved in an accident, your insurance premiums may go up in one of these three ways: first, you may be required to pay an accident surcharge; second, your base rates may go up; third, you may no longer qualify for reductions that bring your total cost down.
Surcharge schedules are available from most insurance companies, and they detail exactly when premiums go up and why. Nevertheless, every business operates on its own timetable, and state laws also have the potential to influence rate hikes.
It’s possible that the insurance provider with the most affordable premiums also has the most expensive penalties, in the form of surcharges, for accidents. It is a good idea to make a request for the surcharge schedule from your insurance company so that you are aware of what can happen to your premiums in the event that you have to make a claim.
A first accident or an accident where the damage is less than a specific amount may not result in a surcharge being applied by some companies. Despite this, it is possible that your base rates will go up because you have been transferred to a higher risk category with the other drivers.
It is legal in many jurisdictions for insurance companies to group drivers together and calculate rates based on the group as a whole. Because of this, if your insurer places you in a bucket with other drivers who file more claims, you will wind up paying more for your basic premium.
The last reason why your rates can go up as a result of an accident is if you are no longer eligible for the safe driver discount. Your premium will go up as a result of losing that discount even if there has been neither a surcharge nor an increase in the base rates. The price hike is expected to be in force for a period of at least three years in the vast majority of instances.
Accident forgiveness means an accident is forgiven, not forgotten.
The specifics of accident forgiveness vary widely from insurance to insurer. If you meet the requirements, it could be provided at no cost to you as a driver, or you might be required to pay a fee for an upgraded insurance.
Some insurance companies may instantly add it to your policy, while others will wait until you have a clean driving record for a certain number of years. A minor traffic citation for speeding is enough to have you kicked out of various competitions.
On the other hand, forgiving does not mean that the incident did not have place. The incident is still documented on your claims report, where it will remain for anywhere between three and five years.
It is also important to understand that the privilege of accident forgiveness cannot be transferred. Should you make the decision to switch insurance providers, the accident will be factored into the cost of your policy by the new provider.
Paying out of pocket may be best
If you can afford to pay for a minor fender bender out of pocket you are probably better off, as you get to save your accident forgiveness for a larger accident.
However, if you cannot afford to cover an accident out of pocket, using your auto insurance may be the only option. Auto insurance is designed to help avert financial disaster. If that requires filing a claim, so be it. However, don’t file a claim just because you can.
How do I qualify for accident forgiveness?
While it is possible to pay for accident forgiveness with some insurance companies, in most cases, you will need to be accident-free for at least three to five years to qualify. Check with your insurance company regarding what they require to qualify for accident forgiveness, once you have reached that threshold, ask them to add it to your policy.
What are the best insurance companies for accident forgiveness?
The best company for accident forgiveness varies by personal factors including the state you live in. A few states, including California, do not allow insurers to offer accident forgiveness. Check with your current insurer about their accident forgiveness options. If you’re not happy with their options, shop your coverage.
Here is a quick overview of a few insurer’s accident forgiveness programs:
- Liberty Mutual: Liberty Mutual offers accident forgiveness as a perk if you have been accident-free for five years and the perk applies to all drivers in your household, including teens.
- Nationwide: Nationwide will charge you for their accident forgiveness program and the cost will vary depending on your personal factors.
- Geico: Geico offers accident forgiveness as both a perk and as a purchased add-on to your policy. In order to qualify for it as a perk, you must be over 21 and accident-free for five years. Accident forgiveness is not available in California, Connecticut or Massachusetts.
- Allstate: Allstate is a bit different from other insurers when it comes to accident forgiveness. Allstate requires policyholders to be carrying their Platinum of Gold coverage plan to qualify. The Platinum plan activates accident forgiveness immediately. The Gold plan requires three years of accident-free driving to qualify.
How long does an accident stay on your record?
It varies by insurance company but, in most cases, an accident will stay on your insurance record and impact your premiums for three to five years. It’s possible to ask your agent or insurer how long an accident will raise your rate so you are aware of how long you will be paying a higher premium.
Insurance companies rate risk differently, which means that some insurers may raise your rates less than others for an accident.
Lowering your car insurance rates after an accident
If you are involved in an at-fault accident and do not have accident forgiveness on your policy, your rates most assuredly will increase.
A few tips to bring your premium back down:
- Shop your coverage: This is probably the best way to lower your premium. Insurers rate risk differently, which can result in dramatic differences in premium quotes. Shop at least five insurance companies and make sure you are comparing apples to apples when it comes to coverage levels and deductibles.
- Discounts: Insurers offer a wide variety of discounts. Make sure that all discounts that you are qualified to receive are being applied to your policy.
- Up your deductible: If you can afford to up your deductible, your premium should drop. Double your deductible and your premium should be headed down to a more affordable level. Always choose a deductible that you can easily afford if you have to make a claim on your policy.
Alternatives to accident forgiveness
If you don’t currently qualify for accident forgiveness, you should ask your agent about other discounts that may help you lower your premium. Many insurers offer a good driver discount or a long-term customer discount if you have been with your insurer for a long time.
In addition, some insurers offer a vanishing deductible that reduces your deductible by a set amount (often $100) each year you go accident-free. This is a great way to lower your costs.
Frequently asked questions
Should I get accident forgiveness?
If accident forgiveness is being offered to you as a perk for being a great customer, you should absolutely add it to your policy as there is no real downside.
On the other hand, if you must pay for this coverage, you may want to consider the costs and whether it is worth it to you personally. If you are a careful driver who hasn’t been in an accident in years, it’s probably not worth the additional cost. But if you tend to get in an accident every few years it may be worth the price.
Can car insurance be canceled after an accident?
Yes, you can cancel your insurance at any point, and it shouldn’t impact your claim. You do need to cancel your policy correctly, which usually means sending in written notice or at least calling your agent who will likely have you email a written request for cancellation.
As far as your insurer, it cannot cancel your insurance just because of a claim if your policy has been in force for more than 60 days. However, it may not renew your policy when it is up for renewal. It also can cancel your policy if you haven’t paid your premium, misrepresented yourself on the application, or if your driver’s license has been suspended or revoked.
How much will my car insurance go up after an accident?
It will vary depending on your insurance company as well as the details of the accident. But, in general, you should expect your premium to go up 20% to 50% after an accident and you will be paying those increased rates in most cases for at least three years.
How do I know if I have accident forgiveness on my Geico policy
Geico offers accident forgiveness as both a policy perk to drivers who haven’t had an accident in several years, or it can be purchased as an add-on to your policy. Checking whether it is on your policy is easy, according to Geico’s website:
- Log in to your policy
- Select your auto policy
- An accident forgiveness notification may be shown as a reward
- If you purchased accident forgiveness, you have a few additional steps:
- Select “My Policy Details”
- Accident forgiveness may be shown as an upgrade
Do you pay extra for accident forgiveness?
It depends on your insurance company. Many insurers offer accident forgiveness as a perk for customers who have been accident-free for three to five years and, in these cases, there is no charge for the coverage. Many insurers also offer accident forgiveness as extra coverage for an additional premium.