Some Auto Insurance Customers Opt for Accident Forgiveness

12/04/09

Many auto insurance customers may have heard the term "accident forgiveness" without fully understanding what the concept is all about.

With that in mind, the National Association of Insurance Commissioners (NAIC) is offering consumers some additional information on this feature that is available from various insurers.

According to the NAIC, accident forgiveness typically means that a company will not raise premium costs when a customer gets into an auto accident. This is the case even if the accident was the customer's fault. Accident forgiveness can be a way for insurers to reward longstanding customers, or as a way to ensure that current customers don't move on to competitors.

The NAIC goes on to note that accident forgiveness can involve a customer paying more for their premiums, and that those who do receive this benefit generally need to have had a clean driving record for at least the past several years.

Since in some cases an accident forgiveness feature can raise premium costs as much as 40 percent, the NAIC also points out that it may not be for everyone. However, those paying higher rates already because of a history of accidents and moving violations could find that it may particularly be in their best interest.

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