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Accident Forgiveness: How Does it Work & Which Insurers Offer it?

Last updated by on 20 Comments

This post continues the lessons learned from my wife’s car accident story.

First, we discussed taking a driving class to drop points on your record. Then we chatted about the various types of auto insurance coverage and being covered when you are at fault in an accident.

In this post, we’ll discuss auto insurance accident forgiveness, what it is, how you can become eligible for it, and which auto insurers offer it. Also, before you get to this point, it is also beneficial to know what to do when in an accident, before you leave the scene to get the best result with insurance companies.

How Does Accident Forgiveness Work?

accident forgiveness

There are all kinds of costs that pile up when you get in a car accident.

First, you typically will receive a traffic citation if you were at fault. If your repairs are extensive enough that you make an insurance claim, you have to pay an insurance deductible. The citation can increase the points on your record, which could increase your auto insurance premiums. And to add insult to injury, your insurance premiums could increase due to you making the claim.

The latter is where accident forgiveness comes in.

A number of insurance companies will offer “accident forgiveness” as a perk for signing up as a customer of theirs. There is no auto insurance industry standard definition of accident forgiveness – it can vary from company to company. The basic idea is that auto insurance provider will “forgive” your accident by not increasing your premiums.

The forgiveness has nothing to do with points on your driving record. Your driving record is connected to the government. A company forgiving you WILL NOT wipe out your points or accidents from your driving record.

Accident forgiveness is specific to the company offering it only. If you move to a new auto insurer, there is a possibility they will factor the accident into your insurance premium, even if your previous insurer forgave you.

How do you Qualify for Accident Forgiveness?

Every auto insurance company has a slightly different take on accident forgiveness.

In general, there are three circumstances in which an insurer would offer accident forgiveness:

  1. new customer acquisition: auto insurance companies realize that you are less prone to move to them if they are going to punish you for a past accident, so a number of them offer accident forgiveness to customers with a recent blemish in their driving record.
  2. customer loyalty: some insurers offer accident forgiveness to customers who have been with them for a certain length of time.
  3. driving record history: Many insurers require that drivers have a clean driving record for a certain length of time.

Some require both loyalty and a clear driving record to qualify for accident forgiveness.

What Auto Insurance Companies Have Accident Forgiveness?

Accident forgiveness has become extremely popular in the auto insurance industry as a means to attract and retain loyal (and safe) customers, and a number of companies now offer some variation (which can vary from state to state):

Liberty Mutual: This is our personal insurer. Because we had zero accident or citations in a long time, we were eligible for accident forgiveness with Liberty Mutual. There was no additional charge for accident forgiveness. With Liberty Mutual, you are eligible with 3 years of no citations and 5 years of no accidents, regardless of when you switched to them.

AllState: At Allstate, accident forgiveness comes if you upgrade to their YourChoice Auto plan, which has a cost premium. No set premium increases are noted, you must talk to an agent. Forgiveness at a price? Probably not worth it.

Nationwide: Nationwide accident forgiveness is an option you buy and can be used on one accident per policy.

Geico: According to Geico:

“Accident forgiveness is like having a free pass on your first at-fault accident. If you qualify for GEICO’s Accident Forgiveness*, you won’t be surcharged for the accident and you’ll get to keep any of the good driver discounts you’ve earned. No harm, no foul… GEICO Accident Forgiveness eligibility is determined by your specific policy type, as well as your state laws and regulations.”

Not too specific, are they?

Progressive: Previously, in order to qualify for accident forgiveness with Progressive, you had to have been a Progressive auto insurance policy holder for 4 years with no accidents for 3 consecutive years. There was no additional charge. Recently, the only literature found on their site states,

“Get perks like Accident Forgiveness as you move up in Progressive’s Loyalty Rewards Program.”

The accident forgiveness perk is an area that auto insurers are not being very transparent about, clearly.

A Final Note on Accident Forgiveness:

Liberty Mutual appears to have the best accident forgiveness policies, but I certainly would not recommend choosing an auto insurance policy solely for the fact that they have accident forgiveness. Price and that company’s reputation are more important factors. If you go with an insurer that does not offer accident forgiveness, it is not the end of the world – if they increase your rates, you can price compare and go elsewhere.

However, if you have been in an accident and were “forgiven”, it can seem pretty damn nice, in hindsight.

Unfortunately, however, your auto insurance claim will still show up in your CLUE report for future insurers if you switch policies.

Accident Forgiveness Discussion:

  • Have you used accident forgiveness?
  • How does your auto insurer do accident forgiveness? How much does it cost?

Related Posts:

About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You can also explore every post I have written, in order.

  • Tony says:

    I too have accident forgiveness free of charge with Liberty Mutual. Another coverage worth exploring is Vanishing or Diminishing deductibles. So if you are in an accident your deductible is removed or significantly lower.

  • Warren says:

    Is accident forgiveness actually just a selling scam? I’ve known people who had an accident and there was no increase in their insurance costs. There was no “accident forgiveness” with the insurers, there was simply no policy of automatically increasing the premiums after one accident.

  • john says:

    Insurance companies use a bunch of criteria to estimate risk, and then they price accordingly. Here some are offering to ignore one (presumably important) piece for marketing reasons.

    What’s next, male forgiveness? Red sports car forgiveness? =]

  • Jeanie Groat says:

    Accident Forgiveness Auto Insurance Isn’t So Forgiving.

  • Harry @ PF Pro says:

    I’ve heard of accident forgiveness but never really looked into it. I just go real cheap with my car insurance b/c I know in the long run the less money you pay the better IMO. The insurance company has everything worked out and they’ll just raise their rates if they’re not making enough money.

    last comment got spammed?

  • jill says:

    Erie is another insurance company that offers accident forgiveness.

  • Tina Wilson says:

    I have yet to experience accident forgiveness but my friends have it through their respective insurance companies and love it! Do you all feel the same way? Thinking about switching insurance companies with my new car purchase and would love more info. And since you’re all helping me out, for those who are looking to save on a new car purchase, check out the GM College Discount Program!

  • Calton says:

    My stepson, a nice 30 year old, had a fender-bender in his older Prius. His rate doubled to $200 per month, causing financial hardship. His mom,who has an Excellent Driver rating with Geico, wants to ask him to join her via an accident-forgiveness insurance and to get the multi-car discount for them–which is fine with me. Would they be better off staying with Geico or seeking another company such as those mentioned in GE Miller’s article printed above?

    Mr Miller: Would you email me any responses–any advice plus your advice of course.

  • Priscilla says:

    Hi GE, you are actually wrong in your assessment of Allstate’s accident forgiveness.

    Standard policy-after 5 years with Allstate, you are forgiven for the 1st at-fault accident-no charge (same as Liberty Mutual -but no restrictions on whether you had a citation or not-and Geico)
    Gold-you are forgiven for one at-fault accident every 5 years AND you get 100 off your collision deductible immediately and then get another 100 off every year you remain accident free up to $500 in deductible rewards.
    Platinum-You are forgiven for any and all accidents immediately, you get the same 100 off for deductible rewards as with the Gold AND you get 5% back every 6 months you have been accident free.

    Be someone who has an accident, tell me how little the extra 50 to 100 for the accident forgiveness benefits means when your premium doesn’t go up after we pay 10k out to get your car and the one you hit fixed.

    I am an Allstate agent and wanted to set the record straight. It is definitely worth it. Where the problem actually lies is when people price compare a superior policy against one that ‘says’ it offers something great and it turns out that special ‘offer’ is really just a standard for many companies. Like your personal insurer, Geico and Progressive advertise.

    Drive carefully as your next accident with Liberty Mutual won’t be forgiven until 5 years pass from your last one.
    Priscilla Callans
    Allstate Agent

  • Anna says:

    Just wanted to chime in that I switched from AAA, because they had horrible customer service when I got into an accident. A car hit mine and I ended up rear-ending a 3rd vehicle. The driver behind me then drove off. When I called AAA, they flat out told me that I would be held 100% at-fault, without even sending an agent to assess the damage or giving me a chance to send them the pictures I took during the accident. Long story short, I was left with an at-fault accident on my record and double the premium rates. Thanks, AAA!

    • Dennis says:

      it seems to me that your gripe is that they told you right away it was your fault. they saved you the time and effort of waiting to know. The situation you explained, is your fault. it appears you’re maybe upset that it is your fault. that’s not AAA’s fault. next time maybe you’ll see that the customer service automatically isn’t bad just because its not the news you wanted to hear.

  • Rick says:

    Geico has no accident forgiveness, in my opinion it is one of the con game lies they tell to appear to be competitive with agencies that do. After years of no accidents, we had a minor bumper bender due to icy roads, when the policy came up for renewal, they tried to charge more than double the previous premiums.

  • David Ha says:

    I wonder about accident forgiveness of Nationwide. Are they gonna forgiven after 3 or 5 years, or they not gonna forgive anything after the first forgiveness. And how long the accident record will stay.

  • Beth M. says:

    Liberty Mutual lies about their so-called accident forgiveness. My husband tapped a car in front of him going about 3 MPH at a rotary, no damage to the other car and a ding to his bumper. We were told he had accident forgiveness and our costs were not going to go up. Well, we just got our policy and it has gone up $500 this year!! I called Liberty and was told this is because of my husband’s accident and he now has 3 points added on to his driving record so he doesn’t qualify for the safe driving discount anymore. The whole accident forgiveness thing is a sham because now they just get you with this crock of eliminating the safe driving discount. We will be looking for a new insurance company.

  • Mickey Lester says:

    Ever wonder why they all say switching could save you up to $450? Could this be the agents portion ( his profit) on for getting you to switch? These companies know they’ll get several renewals out of you before you switch again.

    I ran off the shoulder of a street and hit a road sign. The damage to the sign was slight. I am aware now that these steel poles are made of some very sturdy stuff. The damage to my fender, door, and headlight was $2100.

    This happened after 4 years and 7 months with Allstate so, sorry, but no forgiveness for you! Oh, and please renew at your higher rate that is $500 more than last time! Never mind that this is your first accident since 1984 and that you haven’t gotten a ticket since 2001 ( for a rolling stop).

    There is no escape. Resistance is futile.

  • Elaine says:

    I have had Liberty Mutual for my auto & homeowners since 2006 and have never submitted a claim until last year. I was rear-ended at a stop sign; damage to my car was minimal; no damage to the car that hit me; no injuries resulted; I did not receive a citation. Since 2006 my rates have risen 6% per year, despite increasing my deductibles from $250 to $1000. My premium this year has gone up by 12% over last year. Some accident forgiveness!

    This morning I got 5 quotes from other top name companies. Liberty Mutual exceeded the highest quote by several hundred dollars. The companies with significantly cheaper rates are: AARP The Hartford, Travelers, & Farmers. Allstate was a bit less expensive, beating Liberty Mutual by only about $100. By going with Farmers I am able to save $472 on homeowners and $422 on the auto policy.

  • Savannah says:

    So i recently got in an accident. And I am 19 and a new driver. IF I were to get a whole policy of my own in my name would the accide t forgiveness be able to look PAST my accident and not hold it against me. Or would I have to already be insured by that company and get in a wreck to actually get the accident forgiveness. HELP I need answers FAST :( thankyou

    • Dana says:

      Hi Savannah –

      I work for a large insurance company and am somewhat familiar with the accident forgiveness policy of the majority of major insurers. Typically, accident forgiveness only applies if you get into an accident while insured with a company that ‘forgives’ accidents – meaning you would already have to have accident forgiveness in place with your current company in order to take advantage of that feature. If you are switching carriers, most will not forgive the recent accident since it happened while insured elsewhere.

      The accident itself being rated right away is a different story, and is handled differently by each company. Some companies will, for accuracy purposes, only rate on items that come back in your driving record or loss history reports; these usually take 30 days or more to update in the system. Others will rate you based on what incidents YOU report to them, in which case you would have to disclose the accident and be rated immediately. Either way the accident will eventually be rated (depending on how frequently your company re-runs consumer reports). I hope this information helps!


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