What Is Accident Forgiveness Insurance?

If you cause a car accident, you will likely see a rate increase on your next policy renewal. To avoid this, you can purchase accident forgiveness coverage in your auto insurance policy so that you don't suffer an increase in your car insurance premiums.

This coverage is not available in all states or from all car insurance companies, so be sure to ask your independent insurance agent which companies offer accident forgiveness. You can also find this information through an online comparative rating website like A-MAX Insurance .

Remember that accident forgiveness forgives one accident per policy, not per driver. So, suppose multiple drivers on your auto policy have accidents inside a policy term. In that case, the accident forgiveness coverage will not avoid the rate increase to your auto insurance premiums for subsequent accidents.

Even if you have accident forgiveness coverage on your car insurance policy and your rate stays the same after an at-fault accident, the accident stays on your driving record. If you try to shop for a new car insurance policy, the accident will become a factor in your new policy's rate. Car accidents will remain on your driving record for up to five years in most states.

Not every driver qualifies for accident forgiveness coverage, even if their insurance carrier offers it. Typically, a driver must have a clean driving record and be accident-free for three to five years to qualify.

Some insurers may allow one minor moving violation, such as a speeding ticket. Still, you will not qualify if you have a major moving violation, such as a DUI (driving under the influence).

These requirements would apply to all of the drivers in the household, and drivers under 25 may be required to have a completely clean driving record.

One of the main factors car insurance companies use to determine your policy's premium is your driving record. Drivers with accidents and moving violations on their driving record pay higher insurance premiums than drivers with clean driving records.

An at-fault accident could increase your policy premium by up to 40%, so investing in accident forgiveness coverage may be worth the additional cost of your car insurance policy.

If you are a safe driver without a history of accidents on your driving record, you may not think accident forgiveness coverage is something you should not spend extra money on. However, consider that an at-fault accident will impact your insurance rates for three to five years, depending on your insurance carrier. Spending a little extra to purchase this valuable coverage could save you a lot in the long run.

If you are considering accident forgiveness coverage but don't want to increase your car insurance rates, ensure you are getting all the discounts you are eligible for on your policy. Stacking these discounts may help you save enough money to offset the cost of the accident forgiveness coverage. Check for these possible discounts and ask your insurance company or agent for any others you may qualify for.

• Good driver discounts: Drivers who exhibit good driving behavior by not getting moving violations and getting into accidents may be eligible for extra discounts.

• Billing Discounts: If you are willing to pay your auto policy in full when you purchase it or allow the insurance company to directly debit your checking account or charge your credit card for your monthly premiums, there is usually a discount through your car insurance carrier.

• Bundling Discount: If you have a home insurance or renter's policy with the same insurer through which you purchase your auto insurance, you will be eligible for a bundling discount on the cost of your insurance.

• Defensive Driving Discount: Consider taking a defensive driving course to reduce the cost of your insurance.

• Distant Student Credit: If you are a student and attend a school that is more than 100 miles away from your home and you do not have a car on campus, you can qualify for a distant student credit because you will not have access to a vehicle full-time.

• Good Student Credit: This is a discount awarded to drivers under 25 who are enrolled full-time in school and have a grade point average of 3.0 (B) or higher.

• Homeownership Discount: If you own a home, some car insurance carriers will give you a discount even if you do not insure your house with the same insurer that covers your car.

• Low-Mileage Discounts: If you don't commute every day or don't drive your car often, you may qualify for a low-mileage discount from your insurance company.

• Tracking Device Credit: Most auto insurance companies offer a discount if you sign up to use their mobile app or install a small device in your car that reads your driving activity and reports back to the insurer.

• Veteran Discount: If you are serving or have served in the U.S. military, your car insurer may offer you a discount for your service to your country.