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

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:


  1. Tony
  2. Warren
    • David
  3. john
  4. Jeanie Groat
  5. Harry @ PF Pro
  6. jill
  7. Tina Wilson
  8. Calton
  9. Priscilla
    • PureBS
    • Kevin Bouknight
  10. Anna
    • Dennis
      • Barry Benedict
    • john
  11. David Ha
  12. Beth M.
  13. Mickey Lester
  14. Elaine
  15. Savannah
    • Dana
  16. Mrs. Narain
  17. LP
  18. montre
  19. Sarah
  20. Carson

Leave a Reply

Join 10,000+ wealth builders. Get posts emailed to you, for free.