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Consider adding accident forgiveness to auto insurance policies, group says

Accident forgiveness may add cost to an insurance policy but can provide increased peace of mind

Accident forgiveness can be a worthwhile addition to an auto insurance policy, the National Association of Insurance Commissioners suggests.

For accident-prone drivers, accident forgiveness makes sense. It’s typically offered as an extra service, or endorsement, on an existing policy, but some insurers may include it in a standard policy. Accident forgiveness does cost more, the NAIC notes.

Typically, loyal customers or especially safe drivers can purchase accident forgiveness if their plan allows it. Different insurance companies’ eligibility rules apply, the NAIC says, and some insurers’ rules may be stringent. Even one speeding ticket can render a driver ineligible for the service.

Some insurers may offer it as an enticement to attract new customers, offering a reason to shop for a new policy. And, because an accident can lead insurers to charge up to 40 percent more for premiums, a single accident can justify the higher cost of accident forgiveness.

Drivers who live in congested areas and already pay high auto insurance premiums, and those with a history of accidents, would likely benefit most from the service, the NAIC says.

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Posted: December 3, 2009

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