What is Accident Forgiveness and how does it work?

Posted on December 17, 2020

Many commercials and advertisements create the impression Accident Forgiveness coverage is a unique coverage.  Most every Massachusetts auto insurance company offers some variation of Accident Forgiveness coverage. As with many insurance coverages, the language and protection provided by each company can be quite different.

There are two types of coverage related to accident forgiveness:

• Full Accident Forgiveness
• Partial Accident Forgiveness

Full Accident Forgiveness

Full Accident Forgiveness is similar from company to company.  If there is an accident, the insurance company will waive any accident “points” that would raise your rates.  It is as if the accident did not occur.  Not only would you avoid being surcharged on your policy for the accident, but you would keep any credits discounts relating to a loss free discount or good driving record.

Most insurance companies have requirements which must be met in order to be eligible for this important coverage and benefit.  However, some companies do not offer it if one or more drivers have a poor or high driving record.  Others will require all or at least one driver to have a good driving record.

Additionally, the coverage may not apply unless the policy has a Massachusetts Safe Driver Insurance Plan rating of at least a step 98 or 99. For example, if you have two drivers, one is a SDIP 99 and the other with a couple of points on their record, while the policy is eligible for Accident Forgiveness it will only apply to the driver with the step 99.

Partial Accident Forgiveness

The variations of full Accident Forgiveness between insurance companies pales in comparison to the company approach for Partial Accident Forgiveness.  In some cases, you will still get the same benefit but it may be more restrictive.  Or, you may get a reduced benefit with the same eligibility.  Or it can be restrictive on eligibility and benefits. It is very confusing!

One area where the coverage benefit is often reduced is in the application of the forgiveness.  Although the accident may not create a surcharge in your premium, you may lose a policy discount for being a good driver.

On the other hand, you may see a reduced benefit but greater eligibility.  For example, some companies allow the coverage for drivers with a slightly worse than a “perfect” 99 record.

Additional Considerations

There are a number of additional items to consider when reviewing Accident Forgiveness coverage.  Most inexperienced drivers (less than 6 years licensed) are ineligible for the coverage.  In some cases this is explicitly stated; in others it is simply because of their SDIP.  For example, you cannot earn an SDIP step of 99 until you have been driving for at least 6 years.

Various policy endorsements handle multiple accidents differently.  In some cases the endorsement allows for an accident to be forgiven for each driver.  In other cases, only one accident per policy is allowed.  Again, confusing.

The type of vehicle being rated can also be a factor.  Accident Forgiveness may not apply to certain vehicles like motor homes, motorcycles, antiques, or trailers.  Even the vehicle involved in the accident can impact the application of the forgiveness.  Some companies require the accident occur in a vehicle listed on the policy, rather than a rental, in order to be eligible.

Finally, in all cases, the application of any type of Accident Forgiveness does not exempt the accident from your official Massachusetts driving record.  It may also affect your driving record in other states depending on how that state gathers accident data.

While Accident Forgiveness coverage seems fairly straightforward to start, it is actually a very, no, extremely confusing, complex coverage.  In addition to all of the factors above, the premium difference can be significant.  Some insurance carriers can charge as little as $10 while others are over $100 per policy.

If you are a current client, call your account manager today to see if you have Accident Forgiveness and review the details or obtain a quote to add the coverage.  If you are not a client, call us today to get a detailed review of your current policy and learn about your options and benefits of working with your local independent agency: Aronson Insurance.

We’ve partnered with local residents for over 100 years, and we’re honored to continue serving Massachusetts residents with competitive, flexible and personalized policies. To get professional advice on any of your insurance questions and concerns or to schedule a consultation and find the right coverage for you, call us today at 781.444.3050.