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Major Insurers Offer 5 Year Accident Forgiveness Policy

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All-State has been touting their accident forgiveness policy, going so far as to use President David Palmer as their spokesperson (24 rules!), but did you know a lot of companies offer this benefit? In fact, All-State’s accident forgiveness plan is only better than the competition if you have their more expensive levels of insurance (7-15% more expensive). With their standard policy, you get the same level of forgiveness as most other insurers – one forgiveness in the last five years.

Who else offers one free accident every five years? Basically every one else.

Here’s GEICO’s accident forgiveness policy:

Accident forgiveness eligibility — In most states, many customers who haven’t had an at-fault accident in the previous five years of being insured with GEICO may qualify for accident forgiveness. GEICO will not increase your premium as the result of your first at-fault accident after qualifying for this benefit. (source)

You’ll notice the “most states” part (which will appear in every insurer’s mention of accident forgiveness), that’s actually not a restriction made by Geico but one made by the state regulators themselves. Some states have regulations that change the rules regarding accident forgiveness but a lot of other insurers offer accident forgiveness for five years of insurance.

That’s one more reason, outside of potential loyalty discounts, why you might want to stick with one insurer instead of going with the cheapest option every few years.

Does anyone know if accident forgiveness is required by some state laws? I see mention of how the rules for accident forgiveness depend on state law but I couldn’t seem to find anything for Maryland when I searched.

{ 24 comments, please add your thoughts now! }

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24 Responses to “Major Insurers Offer 5 Year Accident Forgiveness Policy”

  1. Phil says:

    In Georgia, there is a required formula for figuring out the depreciated value of a vehicle if it has been involved in an accident that gets paid to the person hit (I don’t know about multiple vehicles, though).

  2. Dean in Des Moines says:

    Don’t forget that these insurance agencies are corporations with profit in mind. Sure accident forgiveness sounds good, but they are not giving this away. You are paying extra for it and they are making a profit selling it.

    • jim says:

      All State charges you more for accident forgiveness before the first five years but all the others don’t. While I do agree insurance companies are corps with profit in mind, this particular policy isn’t so insidious.

      • Mike says:

        Oh…you are paying for it. It’s in the rates. If a company pays out for claims but doesn’t recoup the losses by way of a surcharge, then the whole rating territory will go up in price. You don’t get anything for free Jim. Pay me now or pay me later…

  3. It seems that the auto insurance companies are trying to take credit for a certain State’s law. I am an insurance agent and know that thats not the case here in California. If you have an at-fault accident, you’ll be charged for it. I’ve seen the auto insurance commercials that talk about accident forgiveness in California by Allstate.

  4. Ryan says:

    I work with allstate insurance and can tell you a few things. You would be looking at a very minor premium increase (in fact with our platinum plan would give you a check for 5% of your premium! This means for a very low 2% or your 6 month premium (which if you have EZ-PAY would be discounted) you now have unlimited accident forgivness. Deductible rewards for a collision($100 dollars from sign up and $100 every year you go without an accident), and a refund check!! NOT a BAD deal!
    All day long i talk to people with $2-3,000 claims and they say they wish they had our product. My customers who do (89%) will never worry about their rates again!
    No trick, scams or anything else just a great protection that is affordable!

    • Peggy says:

      I hit someone from behind in CA. No forgivness. I called my allstate agent. Nothing he can do. Surcharge was hugh and I lost my good drivers discount.Even though I hit from behind with minimal damage, the lady infront went to the doctor. $5000!!! ouch. But the third party in the accident said it was his fault the accident happened in the first place. Aribitation did nothing. I am going to fight this one! any suggestions what I could do?

  5. Shirley says:

    31 years with 21st Century Insurance. No tickets. Three accidents in 31 years – only one of which was my fault. Just happened this January – they raised my rate over $300 dollars. Disgusting. Who and how do they determine how much they will raise your rate? Why would anyone remain loyal to a company after that kind of treatment, after paying them thousands of dollars for 31 years???

    • Eric says:

      21st Century had Accident forgiveness when I reported an accident in 2005. Today I received a renewal which was $200 less! I called in and they told me that in 2006 Califronia Prop 103 required them to remove accident forgiveness. Because of this, I had been paying extra for this accident all this time, an extra $400 a year! What a rip off! I would have paid this claim out of pocket had I known it would have been charged against me!

  6. Joe says:

    I have Allstate with the accident forgiveness Platinum Plus policy and my teenage son backed into somebody in a driveway and caused less than $1000 damage. Allstate promptly increased my premium by almost 25% by adding on an accident surcharge to my policy. I have five cars insured on Allstate and they increased the premium on every single one. Doesn’t sound like accidnet forgiveness to me.

  7. Stigmata says:

    Ive heard so many stories like yours, joe, along with comparisons between the percentage allstate charges and the free coverage of others. Laws are still enforced, however, and there has to be some fine print somewhere that you didnt read, otherwise theres no way what they did was legal, and you could take them to court if it wasnt.

    Perhaps Im being a little naive about the trust we put in our system to bring us justice though. This is america, after all.

    -Stigmata

  8. MJ says:

    The same thing happened to me too Joe. I was shocked to see that my rates went up by over 200 bucks after just one accident when I had accident forgiveness. They explained it by telling me that they do in fact taking away your save driving discount (worth about 200 bucks) but they don’t charge you a surcharge on top of that (lucky us). They’re ploy is a deceitful scam and I’m currently shopping around for this reason!

  9. LISA says:

    All State accident forgiveness is a scam. We have experienced it. I think there should be a class action law suit against them. They are false advertising, charging a premium price for this coverage and then when you have an accident they drastically increase your premium. All State accident forgiveness is a SCAM!

  10. Dee says:

    We are getting charged 1/2011 for an accident that occurred 1/2009 – they made an error and did not surcharge us. We thought they did not surcharge us as they told us in 1/2009 we were platinum premiere plus members and had accident forgiveness. Well guess what 2 years later their mistake and now they want to charge us for 2009-2011! So they make a mistake, catch it, and make us pay?!!! Where is the forgiveness?

  11. Christine says:

    My husband went to pick up my friends son in December 2010 when it was snowing. As he entered the school parking lot, at 5 mph, it was soooo icy that he slid straight into a pole the school had. Allstate paid out $400, and raised our policy $1100 more a year. I’m so disgusted with Allstate because this was something my husband couldn’t control. When he went to put the claim in the women at Allstate said it wouldn’t effect our rate. We’ve been with them for 7 years. Neither of us had any accidents or tickets prior and the one little fender bender he has not even involving another car and they raise it $1100/yr. So much for their Accident Forgiveness policy…

    • Justin says:

      I’m sorry but who do you think should be assigned fault in this situation? In a single vehicle accident, the driver of the ONLY vehicle involved always has fault. You are required to maintain control of your vehicle at all times.

  12. Maggie says:

    I am furious with Allstate! I’ve been with them for two years and I’ve been told that I have the platinum accident forgiveness plan and that my premiums would not go up if any of my three covered vehicles were to get in an accident. BS, my college son was involved in two car accidents which ended up to a claim of $32,000. My renewal went from $1,600 something to $2,810.48. I called them to find out about the so-called accident forgiveness and I was told that they had an across the board increased. I called my friend, who had just renewed with them, and she told me that her car insurance premium was not increased. I am shopping around right now…Bye Allstate!

  13. Holly says:

    Accident forgiveness by any company is a SCAM! We had USAA. I had an accident in April 2011 and was told repeatedly that because we had accident forgiveness, there would be no penalty whatsoever. I had another accident in May. USAA waited almost 6 months and then CANCELLED US? We’ve been with them for over 15 years! I spoke with the underwriter and she admitted, that they couldn’t raise our rates because of the accident forgiveness, so they cancelled us instead. I’ve already filed a complaint with the State Insurance Commission and am going to also go to the Attorney General’s office and the FTC. I am also going to talk to a plaintiff’s lawyer. This is such BS! I paid for a benefit and then was denied that benefit when I needed it.

  14. Jason says:

    Everyone in here that are upset with their insurance company are wrong. The reason you are upset is because you don’t understand insurance. Accident forgiveness forgives the surcharge. It does not prevent you from losing extra discounts that you may have earned for being accident free in past.

    Your insurnace company can non-renew you at any time in CA as long as you don’t qualify as a CA good driver. You are spinning your wheels for nothing reporting them to the insurance department.

    Read you contrats, get an agent that you trust, listen to what he tells you, and take responsibility for what you have done. Accidents cost a lot of money. Stop having them, learn to drive and all our rates would be much better.

    • Anonymous says:

      I’ve never been in an accident and have no tickets in 14 years of driving and last week I had a hit and run on my truck and my premiums went up on all my vehicles including my 5th wheel and boat. So how would you recommend I to take responsibility for that?

  15. Ginger says:

    I have USAA, an I’m a Goldmine, I’ve got 4 vehicles, renters, trailer insurance, an I do all my banking there. And Ive had my share of accidents, I’ve rode motorcycles for years, but moving to CA has made insurance ridiculous!

  16. USAA has been a wonderful company to me since 1986. In Las Vegas NV as well as Elizabeth NJ. I have had accidents and my rates have not gone up because of them, my fault or not. Insurance Companies are businesses that need to make a profit to stay in business. Their rates are regulated by the Dept of Insurance in each state. Most companies rates are based on what they have paid out in claims in the recent past and take into consideration when rating a policy, your age, zip code, type of car, driving record, and the limits and deductibles chosen. Dont shop the rate before speaking to your agent to see what can be done to bring your premium down. Ask about other discounts, make sure that they dont still have your teenage son rated on your policy that moved away last year. Ask other lines of business that, if purchased, might bring down the cost of your car insurance. Had a client that saw a 10% decrease in their car ins for purchasing a $150,000 term life policy at $7.95 per month. ASK QUESTIONS!

  17. Jesse F says:

    I have been insured with Geico for almost ten years & will be dropping them as my auto provider. I have one at fault accident that paid out $900.00. This was said to be forgiven but was it? I also have a seat belt ticket. My renewal went from $133.00 to $295.00. Did my seat belt ticket really double my monthly cost or is Geico pitching a curve ball about accident forgiveness?

  18. Jim A says:

    Been a Geico customer for 17 years. Recently my daughter had a accident which was her fault. In speaking with customer service we were told accident forgiveness was on our policy and rate change. This past week I received a letter explaining that we are getting a 5.95% rate increase on our renewal for 03./2014 based on the accident.

    I called with the inquiry and now am being told Accident forgiveness for Maryland does not apply to any driver under the age of 21.

    Crazy !!!!!!!!!


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