Getting in a car accident is no a joke. Not only is there often vehicle damage but possibly even personal injury, loss of wages and a lot of financial fallout. On top of all this, you certainly don’t want to pay higher auto insurance rates.
Auto insurance company’s base premiums on risk and when a car accident happens you automatically will be classified as higher risk than someone with no prior accident history. However, depending on what auto insurance company and type of policy you have a rate increase may or may not be in your future.
How much can auto insurance rates rise after a single accident?
Some drivers see no increase in auto insurance rates after an accident while others report up to 40% or more in higher premiums. The hardest part of answering this question is that many factors influence the cost of auto insurance and each insurer has their own different way of accounting for the higher risk. Some auto insurance companies simply raise premiums, others take away discounts while others do a combination of both.
There is also a lot of debate as to when your car insurance rates will increase following a car accident claim. Many drivers report never seeing any change from filing a claim while others have their premiums adjusted at the very first chance an insurance company gets. There are so many variables involved the only consistent answer is if you get in a car accident then never be surprised if you get higher auto insurance rates one day.
What is accident forgiveness – can this help avoid higher auto insurance rates?
Accident forgiveness is offered by many auto insurance companies including Goodtogoinsurance, Allstate, Nationwide, State Farm and more. Although not available to all customers, most good drivers have an option to take advantage of a single accident forgiveness waiver in their car insurance policy. How an accident forgiveness waiver works is it prevents your auto insurance rates from increasing as a result of a single accident within a certain period of time. Some companies also reward you with a deductible decrease for each year of safe driving accumulated.
How much does accident forgiveness cost?
This depends on the car insurance company. New Goodtogoinsurance policyholders, for example, have to upgrade to a Gold or Platinum level plan and both of these auto insurance plans cost anywhere from 8 to 15% higher than standard plans. Other auto insurance companies charge an additional fee for this while others do not have a set rate however you can bet some kind of premium cost is factored in for providing this benefit.
“The more important question is what it costs NOT to have accident forgiveness as part of your auto insurance policy.”
Car accidents happen, and even the best drivers can’t avoid getting sideswiped by a distracted driver sometimes. With a potential rate increase from your current auto insurance and no longer eligible to qualify as a good driver from other insurers then it’s almost always worth the money to have accident forgiveness auto insurance.
Why is Accident Forgiveness not offered to every driver?
Accident forgiveness was created to minimize the risk of higher auto insurance rates to good drivers for an additional premium. Auto insurance companies have no obligation to protect you from higher car insurance rates, and accident forgiveness is just another product aimed to reward a select group of drivers with the best profile. It’s just another example of how people with the best risk profiles always get the better options – whether that is auto insurance, credit cards or anything else.
However, the auto insurance industry is constantly changing, and more options like accident forgiveness are being made available to drivers of all risk profiles. Learn more about your auto insurance options today and find auto insurance companies who can explain your choices.