Learning About “Accident Forgiveness”
We get many requests and questions about ‘accident forgiveness’ on policies. Also related to this is something called a ‘disappearing deductible’.
These are simply two different alternatives designed to reduce the impact on your auto premiums if you are involved in an accident.
The way “accident forgiveness” works is that you are paying a higher premium over the life of your policy in order to guarantee that your rate remains unchanged after an accident. This has an understandable appeal. After all, accidents happen and we don’t want our expenses to go up afterwards.
The premiums you’ll be paying, though, are going to be higher – sometimes substantially higher – than you would be paying for regular coverage. This means that you’re essentially pre-paying for the rise in premiums that typically occur from having a a claim on your insurance after the accident.
In other words, you’re paying more now to avoid paying more if you do have an accident – something that may not happen. Paying more so you don’t have to pay more? That isn’t a good value in most situations.
Many companies offer what is called a ‘disappearing deductible’. These are designed to reward loyalty. The longer you stay with that company and renewing the policy, the lower the deductible becomes.
While both options are designed to save you money if there’s ever a loss, the disappearing deductible option tends to be a better option for most of our clients.
As with most things, there are a variety of other factors that should be considered when choosing these options. Helping you decide what is best for you is why we’re here.