Auto accidents can be a very stressful ordeal. If no one is seriously hurt, your first worry may well be getting your car fixed. After that, your concern will probably turn to how much your insurance is going to go up.
Some auto insurers offer what’s called “accident forgiveness,” in which case a single wreck won’t (in theory, at least) affect your car insurance premiums.
So, is it worth seeking out a policy with accident forgiveness — even if it means paying more for the premium?
Money expert Clark Howard has some thoughts…
What you need to know about accident forgiveness
The car insurance industry is sustained by the premiums that drivers pay. When there’s an accident, the payout can be costly for them. That’s why your auto insurance premium is almost sure to go up after a crash.
Enter accident forgiveness.
Clark explains: “If you’re with an insurer that does one-time accident forgiveness, your insurance won’t go up.” It’s a product that insurance companies started offering in the last decade or so.
Some insurers offer accident forgiveness as an additional feature, while others include it in their regular policies. Here is a sampling of some major insurance companies that offer accident forgiveness:
Auto insurance companies with accident insurance
So, should you go out of your way to do business with one of these companies?
Clark says that unless accident forgiveness is already a part of the policy you’ve shopped and found to be the best fit for your budget, probably not. Why?
“Because you’re almost certainly paying for that as part of your premium,” Clark says.
That’s because typical accident forgiveness policies are marked up to pay for themselves over five years.
In other words, the money you could be saving by purchasing a plan without accident forgiveness will more than offset the claim you might be “forgiven” for with a policy that includes it.
The bottom line on accident forgiveness
Sure, accident forgiveness is great as a perk of policy that makes sense for your budget but if it costs extra, you probably want to forgo it.
Here are some other articles from Clark.com you may enjoy:
- Best and worst auto insurance companies
- Real-life story: How Clark Howard saved me 43% on my auto insurance
- Auto insurance: How to shop for a new policy in 2019
[ This article was originally published on Clark.com ]
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