You’ve probably seen the ads by some big name insurers (some of whom we represent) about a perk called “Accident Forgiveness.” What is it?

Insurance companies rate policies by calculating the potential risk of insuring certain people and vehicles. If the risk of the insured having a costly accident is low, the premium will be lower. If the risk is higher, the premium will also be higher. Risk is calculated, in part, by reviewing driving records for past moving violations or accidents. This doesn’t just take place when writing a new policy, but each year that a company has a policy it reviews driving and claims records and adjusts the premium accordingly. So, an accident during any given year could cost you in premium on your renewal.

Accident Forgiveness is the idea of allowing a customer whose past record has been acceptable a “free” accident when rating their policy. So, if you meet that company’s criteria for lower premiums otherwise, and then have an accident, they will choose to not charge an additional premium because of that one accident.

Each company has different guidelines about this, so be sure to ask your agent about your policy.