What Is Accident Forgiveness

In the “bad old days,” the moment you had even a minor fender scrape that got reported to your insurance company, your insurance premiums went up.

Accident forgiveness is a marketing term mostly, used by companies like Geico and State Farm, to tell you that you can avoid having your rates go up if you get in an accident.

This is limited to a certain number of accidents and only certain types of accidents within a period of 3 or 5 years, so it’s not like you can have a huge wreck every year and never see your premium go up. The basic premise is that no one’s perfect, and if we have a little accident, they can overlook it instead of automatically jacking up our rate.

An interesting point of view expressed by some critics is that very good drivers should avoid insurers that offer accident forgiveness, because someone has to pay for that forgiveness. If the drivers who are getting in accidents aren’t getting their rates jacked up, then the rate hikes just get spread across the premiums of all the drivers.