Collision forgiveness appears in so many TV insurance ads, it is good to know if an insurance company will really forgive drivers when they are involved in an accident. Standard auto insurance policies give the driver a lower rating when they are involved in an accident, and thus their premiums would go up. In contrast, collision forgiveness protection is a higher cost insurance feature from the onset of the policy but does freeze the first accident rate hikes.
Some insurance providers make this feature built into their policies whereas other companies offer it as an add-on endorsement. Drivers can expect 10 to 20 percent higher rates for collision forgiveness policies, but it does protect them from increases should an accident occur.
You will want to know how your provider will protect you when an accident happens, as some companies have only partial, not total, forgiveness policies.
Total forgiveness policies will charge no increase in auto insurance premiums for the first accident. Insurance companies reserve these types of policies for drivers who have never caused an accident and have no traffic violations or tickets on their record. Because these drivers seem a low risk of filing future claims, many insurers are marketing this policy to attract this driver profile.
Partial forgiveness policies will only slightly raise premiums, but not drastically compared to drivers not using the protection at all. And if a driver is used to discounts given for safe driving records and involved in accident, they could lose these savings.
An insurance company might forgive a driver, but come renewal time, they could spike their rates or not renew the policy. And when the driver goes to find a new company, they could realize that they must inform them about the incident as the company will be sure to find it on the driver’s record. The new insurer will charge that driver higher rates and most likely not offer accident forgiveness.
It pays to go over your options with an experienced agent so you know how your driving habits will fit with an insurance provider. Getting accident forgiveness for a few more dollars per month could save you a lot of money after your first accident.