Should You Buy an Auto Insurance Policy With Accident Forgiveness?

What Is Accident Forgiveness & Is It Worth It?
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If you’ve ever been in an accident, you may be wondering if your insurance is going to go up. Even a slight increase in your insurance rate can make a big difference in your bottom line.

Some auto insurers offer what’s called “accident forgiveness,” in which case, they say, your first crash won’t affect your car insurance premiums.

But is there a catch? Money expert Clark Howard, who has dedicated his life to helping people save money, says accident forgiveness may not be as good a deal as you might think.

In this article, we’re going to break down what accident forgiveness is and whether it’s worth it. I’ll also include some things I learned after going through the process of buying accident forgiveness.

What Is Accident Forgiveness?

Accident forgiveness is typically offered by auto insurance companies as a policy perk that “forgives” at-fault accidents on a one-time basis, meaning your premium won’t go up.

The car insurance industry is sustained by the premiums that drivers pay. That’s why your auto insurance premium is almost sure to go up after a crash.

Because at-fault collisions typically stay on drivers’ records for three to five years, accident forgiveness is attractive to some insurance customers.

This insurance feature is often promoted as something only the best drivers or most loyal customers qualify for. Many insurance companies also sell it as an add-on to your policy.

Who Offers Accident Forgiveness?

Here are some of the biggest insurance companies that offer accident forgiveness along with some details on their plans:

Insurance CompanyPolicy Details
AAAOffered for drivers who haven’t had any accidents and are claim-free for 5 years. You’ll also be forgiven for “small claims” ($250).
AllstateAllstate says accident forgiveness “starts the day you sign up” with their Your Choice Auto policy.
GeicoGeico can reward certain drivers with accident forgiveness once they’ve reached a milestone anniversary, or it can be purchased. It is not available in California, Connecticut and Massachusetts.
Liberty MutualOffered as an additional coverage for drivers with clean records for 5 years. Not available in all states.
NationwideOffered only in select states and for an additional charge. Also extends to family members on your insurance — but for one accident per policy.
ProgressiveOffered to those who qualify for Progressive’s Loyalty Rewards program.
USAAOffered for an additional charge, but free after 5 years with no accidents.
The HartfordThe Hartford's upgraded Advantage Plus package includes accident forgiveness. All drivers on the policy must have a clean record for 5 years.

For emphasis, let’s look at some data that shows what drivers with one crash pay compared to those who have no accidents.


How Much Does Accident Forgiveness Cost?

In the select cases where accident forgiveness comes at an additional cost, the price varies.

An insurance agent with Geico told me that accident forgiveness varies based on the specific driver and policy. She said that the amount you’ll pay is always based on a percentage of the premium.

I went through the process of buying auto insurance with Nationwide and a $385 monthly premium jumped to $394 when I added accident forgiveness. That’s a little over $100 a year extra I would be paying.

Cost of Accident vs. No Accident

Without taking into account driver age, comprehensive or liability coverage, insurance comparison site The Zebra came up with average insurance rates for 2019. Here are the numbers:

  • Drivers with no accidents paid an average of $1,548 per year for insurance coverage
  • Drivers with one at-fault accident paid the $1,548 plus $767 more per year

Using these figures, drivers with accident forgiveness who have an at-fault collision could save that $767 a year over five years, the typical time it takes for an crash to no longer count against you. That’s $3,835!

Is Accident Forgiveness Worth It?

So, you may be wondering if it’s worth seeking out an auto insurance policy with accident forgiveness.

Clark says that unless accident forgiveness is already a part of the policy you’ve shopped for and found to be the best fit for your budget, it’s probably not worth it.

Although it’s a personal choice whether you choose to buy accident forgiveness, it may cost you $100 or more a year for no other benefit other than peace of mind.


The key takeaway here is that it pays to do your research when it comes to accident insurance. If you’re paying for the best insurance rate you can find and accident forgiveness is thrown in for your loyalty, that’s a true perk.

On the other hand, if you’re paying an additional fee for it to be added to your policy, the truth is that you may be able to save some money without it.

If you’re thinking about buying a new policy, we’ve got just what you need. Here’s how to shop for auto insurance.


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