Of late, many insurance companies have been promoting accident forgiveness car insurance options in a big way. At first look, these programs do seem to be beneficial. The question is, are these programs worthwhile?
As the name suggests, if you are at fault in case of an accident, the accident forgiveness program protects you from an increase in insurance premiums when you make a claim. However, accident forgiveness programs come with certain clauses and conditions. For example, most insurance companies will ignore your first at-fault accident if the total payout is less than a certain amount. It is important to remember that this is applicable only for the first at-fault accident. If you are involved in a second accident, you will not be able to avoid the increase in the insurance premium rate.
Some insurance companies will overlook your first at-fault accident no matter what the payout amount it. But this also comes with a catch. You can avail this benefit only if you have been using the same insurance company for a specific number of years and have not been involved in an accident in the past few years. As with the previous case, this accident forgiveness program is also limited to your first accident.
There are several things to consider before you opt for an accident forgiveness program. Just like other car insurance options, accident forgiveness programs are not free and you will need to pay a little extra for this option. In fact, your insurance premium rate could go up as much as $1,000 per year.
In most states, you will be eligible for accident forgiveness programs only if you have maintained a clean driving record for a few years. Also, as discussed before, accident forgiveness programs only cover your first at-fault accident.
On the other hand, there is definitely a bright side to accident forgiveness programs. If you are involved in an accident and file a claim, your premium rate will not go up and the accident will be marked in your driving record. This can be extremely useful if you are cash-strapped. However, some accident forgiveness programs do not cover major accidents.
While accident forgiveness programs seem like a worthwhile program, there are several factors that you need to look at before purchasing it. It is important that you speak to the insurance company and understand the conditions and details before buying in on the program. You must also check how the accident forgiveness program affects your car insurance premium rates. If you are not confident about being able to pay the extra amount every year and if you have had a clean driving record, you can avoid accident forgiveness programs.