What is accident forgiveness coverage?
Accident forgiveness is additional coverage that can be added to your car insurance policy as an endorsement, to protect your driving record and to help prevent your insurance premium from increasing if you have an at-fault accident claim. Note: coverage varies by province.
How does accident forgiveness work?
You must purchase accident forgiveness coverage as an endorsement on your car insurance policy, and the coverage must be present on your insurance policy before an at-fault accident occurs. In the event of an accident, this additional coverage can protect your driving record, and if you are at-fault, your premiums will not increase (You may still have to pay an insurance deductible for repairs to your vehicle.).
Why should I buy accident forgiveness coverage?
If you’ve purchased accident forgiveness coverage on your insurance policy and you have an at-fault accident, your insurance company may forgive the accident, meaning it won’t result directly in increased premiums.
This is because insurance companies understand that accidents can happen to anyone – that's why they’re called accidents. And, that’s why they offer accident forgiveness endorsements – to get you back on track as if nothing happened.
Accident forgiveness is not usually included in a standard car insurance policy – you must purchase it as an endorsement. However, this small additional cost (typically less than $10 per month) can potentially save you hundreds of dollars and protect your driving record. It’s worth discussing this coverage option with your insurance broker.
Why does car insurance go up after an at-fault accident?
After an accident, insurance rates for the drivers involved may increase because car insurance premiums are calculated in part, by using your driving record. Events such as tickets, past claims, criminal convictions, and of course, accidents, are all taken into consideration.
An insurance company usually has access to your driving history and auto insurance is calculated using risk factors. So statistically speaking, the more accidents you’re involved in, the higher the risk for an insurance company when it decides to take you on as a customer.
Accident forgiveness coverage can help protect your premium from increasing due to an accident on your driving record. It’s your insurance company’s way of letting you know they trust you, and that accidents can happen to anyone.
Am I eligible for accident forgiveness coverage?
Accident forgiveness coverage is generally available to drivers with a clean driving record, which means you must be free from any driving incidents for approximately six years as a licensed driver. So, if you have a poor driving record, you can’t shop around to try to get accident forgiveness coverage because it’s based on your driving record, which is accessible by all insurance companies.
Accident forgiveness coverage is only available for private passenger automobiles, not for commercial auto policies.
If you purchase a new car, your eligibility will continue, and the coverage may also be extended to you if you switch insurance companies as long as you’re still eligible – but you’ll have to ask.
Five things to know about purchasing accident forgiveness coverage
In addition to your eligibility, here are five things you need to know about purchasing accident forgiveness coverage:
- The Accident Forgiveness Endorsement must be present on your insurance policy before an at-fault accident occurs.
- You must purchase the Accident Forgiveness Endorsement each year, as coverage is only valid for one term at a time.
- Accident Forgiveness only protects the principal driver of the vehicle listed on the insurance policy.
- After an at-fault loss while the Accident Forgiveness Endorsement is in-force, the endorsement must be present on your policy each year, so you remain eligible for the driving record protection.
- The Accident Forgiveness Endorsement does not apply if:
- there is any violation of the Statutory Conditions or policy conditions in relation to the auto accident.
- you’re convicted of any criminal code offence, or a major conviction.
Looking for accident forgiveness coverage? Contact BrokerLink today!
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FAQs about accident forgiveness coverage
Do I have to pay a deductible if I have accident forgiveness?
If this is part of your coverage agreement, you will still have to pay the deductible to have your car repaired.
What is an at-fault accident?
An an-fault accident is when you’re considered responsible for an accident that you’re involved in.
Do I need accident forgiveness coverage?
Accident forgiveness coverage is optional, so this is a good question to discuss with your insurance broker. If you’re a good driver who purchases it and then you have an at-fault accident, having this coverage can save you money in the long run because your premiums won’t go up and importantly, you also protect your driving record. Maintaining a good driving record can help you continue saving money over time.