What is accident forgiveness?

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Here's what you need to know...
  • Accident forgiveness ensures your rates won’t go up after your first car accident
  • Many insurance companies offer accident forgiveness as a part of their policies
  • There are some drawbacks to an accident forgiveness plan

Accident forgiveness is a feature that many of the top car insurance providers in the country offer. With accident forgiveness, the policyholder’s car insurance rate will not increase if they are in an accident.

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While many car insurance providers offer an accident forgiveness feature, the company best known for promoting this program is Allstate Insurance. Allstate is one of the most recognized car insurance companies in the United States.

The Companies Best Known for Accident Forgiveness

With the Allstate Insurance accident forgiveness program, the policyholder can have their first accident forgiven.

This means that the accident will not adversely affect the policyholder’s car insurance rate. Even though the car insurance rate will not be raised, the policyholder could still lose their good driver discount and safe driving bonus.

Another major car insurance provider that offers accident forgiveness is Nationwide Insurance. The main difference between the accident forgiveness programs of Nationwide and Allstate is that Nationwide extends its accident forgiveness program to teenage drivers.

With Nationwide, the policyholder must be a policyholder with the company for at least five years and be accident-free for three years to be eligible for its accident forgiveness.

With Progressive Insurance, the person must be a policyholder with the company for four years and be accident-free for three years to be eligible for its accident forgiveness program.

The Progressive program only offers accident forgiveness for the first accident.

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Geico insurance company offers accident forgiveness to policyholders who go five years without an accident. This program also offers a waiver for the company’s surcharge after being accident-free for five years.

With Liberty Mutual Insurance, policyholders cannot have an accident for their first five years with the company and no moving violations for three years to be eligible for their accident forgiveness option.

The Liberty Mutual accident forgiveness program also varies from state to state.

How Accident Forgiveness Programs Work

An accident forgiveness program operates under the idea that a person with a driving record that is free from accidents should not have their car insurance premium raised with their first accident.

It is not uncommon for a person’s car insurance premiums to be raised by as much as 40% or more after an accident.

Some insurance providers give their policyholders accident forgiveness automatically while others require the policyholder to be accident-free for a certain amount of time before they are eligible for the program.

Some companies require as much as five years with no accidents before the policyholder is eligible for the accident forgiveness program.

The Pros and Cons of Accident Forgiveness Programs


While the concept of not having a car insurance premium raised automatically after an accident can be very appealing, this program, like most car insurance programs, does typically come at some cost. The policyholder might not always find this cost worth it.

An accident forgiveness program is often described as gambling by critics.

If the policyholder is in an accident and their car insurance premium is not raised, then it all seems worth it. But if the policyholder never has an accident, then they end up paying for something they never needed.

Most likely, if a person has no accidents on their driving record when they sign up with a new car insurance provider, then they will automatically pay a lower car insurance premium.

An accident forgiveness program actually makes more sense for a person that already has a questionable driving record.

A person that already has accidents on their driving record will pay higher insurance premiums than a person with a clean history.

As a result, this person would be smart to enroll in an accident forgiveness program. Since they would already be paying a higher car insurance rate, an accident forgiveness program would prevent their premium from being raised even further if they have another accident.

Another way this program might cost a policyholder more is that some car insurance companies only offer their accident forgiveness programs with their higher priced insurance packages.

Allstate Insurance is an example of this type of company. Allstate only offers accident forgiveness to policyholders enrolled in their gold or platinum insurance plans.

The Allstate gold program costs as much as eight percent more than the standard Allstate policy, and the platinum plan as much as 15 percent more.

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