Accident pardon endorsements are relatively new motorists available with some auto insurance companies. It is not available in every state and may not be available for all drivers.
You can add this rider to your default auto policy. Or it may be built into a standard policy depending on your insurance company. Either way, it’s a useful perk for new drivers, teenage drivers and historically safe drivers. So today, we’re going to take a closer look at auto insurance accident forgiveness and explain everything you need to know.
What is Accident Forgiveness Certificate on Vehicle Insurance?
Accident pardon is usually thought of as “endorsement” on your car policy. In other words, this is an added advantage that you can buy with extra money. Endorsements are also known as “riders”, and we’ve written more about them. Sometimes, accident forgiveness is included in a standard auto policy.
How Accident Forgiveness Works
Accident pardon allows safe drivers to have a single accident claim with no change in premium. Usually only available to drivers with a clean driving record.
Without a motorist accident forgiveness, you may see an increase in insurance prices after a claim. This increase varies on many factors, such as your overall driving record and the total number of claims. Without a motorist accident forgiveness, the premium increase after an accident by mistake could last for several years and may end up costing thousands of dollars in the long run.
We can see how this coverage will bring peace of mind to:
- Parents of teenage drivers
- Young drivers who want to keep their fares affordable in the future
- And an adult driver with an excellent driving history
For them, accident forgiveness is a nice advantage to have. But it’s not available to everyone and isn’t legal in some states. Some insurance agents even consider it a marketing trick, and we’ll talk about that in a moment.
No Accident Forgiveness in California
California is the most populous state in the US, by far. It is also home to more than 27 million licensed drivers. Based on ABC News, there are about two million more Californians who drive without a licence. In short, that’s almost three times the entire population of Ohio.
You must have heard about the smog and traffic problems in some California cities. Unlicensed and uninsured drivers are also in trouble there. Thousands of car accidents happen there every day, and often involve undocumented people who don’t have driver’s licenses, insurance, identities, and homes.
CA 103 . proposition
Back in the 1980s, insurance companies paid for repairs after these accidents and passed the cost on to insurance customers. But consumers who drive safely feel their ever-increasing premiums are unfair.
So consumers unite and voters passed California Proposition 103 in 1988. Ultimately, any auto insurance company that wants to do business in California must offer “good drivers” a 20% discount. The definition of “good driver” is straightforward: no DUI, no accident due to error, no serious claims, and so on.
- In fact, California’s “safe driver” insurance premiums remain the same.
- But any accidental accident immediately pushes the driver into a risk group that charges 20% more.
- They call it “lose your safe driver discount.”
- But it’s not a discount. This is a risk group rating.
What does all this have to do with crash pardon drivers? Well, in California, this endorsement is not legal. After you’ve had an accident that caused more than $500, a DUI penalty, or even too many speeding tickets, you should be grouped with a high-risk individual. This is the law. So crash pardon support is not available there.
Insurers cannot advertise their accident forgiveness options in California. In 2014, based in Boston Liberty Mutual has to pay the Californians $925,000 after an ad campaign pushed the benefits of their accident pardon policy.
Now that you know why accident pardons are not available in the “Golden State”, let’s talk about insurance companies that are known to offer accident forgiveness in other states.
Which Insurer Offers Accident Amnesty Legalization?
Based on we found this list on ExperianThese insurance companies are known to offer motorists accident forgiveness:
- All states
- American Family
- Liberty Mutual
They are a good starting point for drivers seeking this particular support.
Earlier in this section, we mentioned that some agencies consider accident forgiveness a dirty marketing trick. Let’s finish our study of accident forgiveness motorists by exploring the idea.
Accident Forgiveness Ethics: Is It a Slimy Insurance Marketing Trick?
Maybe they are. Judging from its face value, the accident pardon rider seems fair. Safe drivers can choose to pay a little extra now and rest easy knowing their insurance rates won’t skyrocket after fender-benders. This is very fair as an opt-in rider, an added advantage that one consciously chooses after doing some research.
However, accident pardons as built-in coverage in insurance companies’ standard auto policies are unfair.
If auto insurance companies included accident pardons in every good driver’s policy, they would force all good drivers to pay a little extra now for a claim that may never happen.
In that sense, it’s a way for insurance companies to increase premiums on drivers they know are safe. These are the customers who have to pay the least for their policies!
And, just because a driver has a clean record doesn’t mean they are safe drivers. Maybe they got lucky and escaped the doom so far. But should any driver have the privilege of avoiding a premium increase after a serious accident? Insurance premiums aren’t meant to be penalizing, but rising prices might help rein in wayward youths after their first car crash.
Ultimately, insurance companies want to do business with the safest drivers. And that driver should always have the best fare.