Everyone makes an occasional mistake. Unfortunately, when those mistakes cause a car accident, the results are higher insurance rates, a tarnished driving record, and often, lost discounts. Moreover, an at-fault accident stays on the driver\’s record for years, placing an unnecessary floor under his or her premiums. These are the challenges drivers face after they cause a collision.

A growing number of insurers now offer a feature designed to help shield their policyholders\’ rates from a jaw-dropping increase. It is called accident forgiveness. Because it is relatively new, there remains a lot of confusion regarding how it works, how to qualify for it, and what it entails. We\’ll address these and other issues below. You\’ll discover that accident forgiveness, while valuable in many circumstances, is not without limitations.

What Does Being \”Forgiven\” By Your Insurer Mean?

One of the truisms of auto insurance is that causing an accident will send your rates skyward. If the damage is severe, and your actions behind the wheel were particularly egregious, your premiums might even double. The reason is because your insurer will consider you to be a higher risk going forward. From its perspective, you are more likely to cause another accident in the future. Since that exposes your insurance provider to substantial claims, it raises your rates to compensate for the increased risk.

Accident forgiveness alters this picture. In the event you cause a collision, the feature protects your rates from going through a sizable increase. Depending on your insurance company, your premiums might jump slightly or remain at their current level. Every insurer handles things differently (a compelling reason to shop around each time your policy expires).

Lest you consider accident forgiveness to be a panacea to reckless driving habits, it\’s worth pointing out a few of the feature\’s limitations.

Conditions And Limits On Your Insurer\’s Forgiveness

First, this feature is not available to every policyholder. Most insurance companies only offer it to experienced drivers with unblemished driving records. This gives insurers an opportunity to express how much they value their best policyholders without exposing themselves to excessive risk.

Second, your rates will only be protected from a large increase after the first accident. If you cause a second collision, your insurer will be unlikely to \”forgive\” you.

Third, suppose you cause an accident, and your current insurance company protects your rates. If you decide to switch insurers, the new company will not acknowledge your former insurer\’s forgiveness. Assuming the accident is displayed on your driving record, they will take it into account when calculating your premiums.

Fourth, the effect of accident forgiveness does not extend beyond your rates. If, in the process of causing a collision, you break a law or two (DUI, speeding, etc.), you will still need to address the charges.

It\’s also worth noting that many companies maintain their own rules with regard to this feature. For example, an insurer might require that you remain a policyholder in good standing for five years before they add it to your policy.

Collateral Damage (To Your Rates) After An Accident

Most auto insurance companies offer a variety of discounts that help to lower their policyholders\’ rates. For instance, you may be able to earn a rate reduction for having an anti-theft system installed in your car, being retired, or completing a driver education course. Most insurers also provide a discount for maintaining a clean driving record, free of tickets, points, and collisions.

If you are currently receiving a \”good driver\” discount, realize that you may lose it following an at-fault accident. While accident forgiveness will protect your premiums, it is unlikely to protect your discounts. Again, this varies by company.

To summarize, accident forgiveness can be valuable if you cause a collision. But there are eligibility requirements as well as limits to its effect. The most important thing to remember is that each company applies it differently and maintains its own set of rules. Keep that in mind when you compare quotes from competing car insurance companies.

Steven B James is a contributing writer for GetInsuranceQuotes.ca, a website which connects vehicle owners with the right insurance brokers to get cheap auto insurance as well as so called \’high risk auto insurance\’. GetInsuranceQuotes.ca has a wealth of information to help all kinds of drivers find the right car insurance for their needs.

Steven B James is a contributing writer for: http://www.getinsurancequotes.ca, a website which connects vehicle owners with the right insurance brokers to get cheap auto insurance as well as so called \’high risk auto insurance\’. Visit www.GetInsuranceQuotes.ca today!

Author Bio: Steven B James is a contributing writer for GetInsuranceQuotes.ca, a website which connects vehicle owners with the right insurance brokers to get cheap auto insurance as well as so called \’high risk auto insurance\’. GetInsuranceQuotes.ca has a wealth of information to help all kinds of drivers find the right car insurance for their needs.

Category: Automotive
Keywords: cheap auto insurance,high risk auto insurance