Be cautious about getting accident forgiveness

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Car crash

Accident forgiveness might be offered by more insurerers, but consumers might want to think twice. Image from Wikimedia Commons.

Normally, accident forgiveness is something one seeks from the driver of the other car that they hit. However, it’s also an incentive offered by a growing number of insurance companies, where they give a driver a discount or cash back for a period of time with no fender-benders.

At least accident forgiveness gets some cash back

Auto insurance is a royal pain in a particular body part, namely the one a person sits on. State governments mandate everyone has it or get a big ticket and no one wants to need it, because one only needs it if they get in an accident and that is on top of auto loan payoff, keeping the car in decent shape and putting fuel in the tank.

Some auto insurance companies will at least try to cut people a break. One way is by offering “accident forgiveness,” which, according to Forbes, varies across insurers as to how it exactly works. It’s quite handy, as an accident can raise one’s rates up to 40 percent, according to Fox Business, so an insurance company willing to overlook one accident, as some do, is quite a nice gesture.

More offering it

A large amount of companies actually offer it. Dennis Haysbert may be a fine actor, but don’t believe for a minute that Allstate is the only company offering accident forgiveness just because the commercials he appears in feature it. According to the Wall Street Journal, other insurers offering accident forgiveness include GEICO, Nationwide, Liberty Mutual and, according to Fox Business, The Hartford, Progressive and State Farm do as well.

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There’s a rumor Kiefer Sutherland has been running around behind the scenes, covertly trying to keep other insurance companies from doing so. However, it’s only a rumor.

Naturally there is a catch

The policy differs by insurer; some won’t offer it to teenage drivers or their parents whose policy they are on, but others, such as Nationwide, will.

Generally, the idea is that every year one doesn’t have an accident, a bit gets shaved off the deductible. Furthermore, after a certain period of time has passed with no accidents, the insurance company will overlook if an isolated fender-bender occurs. However, according to Fox Business, they also are likely to require a certain amount of time with no moving violations and no accidents in the past few years.

Forgiveness plans also are likely to cost more. Getting Allstate’s plan also requires one to buy their Gold or Platinum coverage, which are an 8 and 15 percent markup, respectively, from their standard coverage. The hidden markup also is why the state of California, according to the Los Angeles Times, directed Allstate and several other companies to stop offering the service. Depending on the insurer offering it, the driver could do themselves a courtesy, ford their way to a normal policy and just pocket the difference between that and the more expensive accident forgiveness policies.


Fox Business

Wall Street Journal


Los Angeles Times:

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