If you have accident forgiveness insurance and cause a crash your insurer will not increase your rates at renewal time. With other policies, you may face a rate increase, called a surcharge, if you cause an accident.

Sounds good, right? Here are important things to know about accident forgiveness insurance:

  • Not all car insurance companies offer accident forgiveness. And those that do may not offer it in every state.
  • Not everyone qualifies. You and other drivers on the policy may need to have good driving records over the last three to five years. That means no at-fault accidents and no violations. 
  • Accident forgiveness is not an unlimited pass. Some insurers such as Geico and Nationwide only allow for one "forgiveness" per policy, not per driver on the policy. Others such as Farmers Insurance and Travelers Insurance allow for one accident forgiveness once every three years.
  • You'll usually pay extra for it. Some accident forgiveness insurance is an add-on that costs extra, such as forgiveness from Liberty Mutual. Insurers such Geico offer accident forgiveness as an upgrade you pay for and also for free if you reach a certain milestone. Progressive car insurance offers accident forgiveness as a perk for its Loyalty Rewards Program.
  • The "forgiven" accident stays on your driving record. The "forgiveness" is only for car insurance rates from your current insurer. If you're in an accident there may be a police report. In some cases your insurer will report accidents to the state. The accident will be on your motor vehicle record, which other insurance companies will see if you decide to get price quotes and switch companies.

More: Compare Allstate, Geico, Progressive and State Farm

Is accident forgiveness worth it?

Accident forgiveness is designed to forgive "major" accidents. The definitions of "minor" and "major" accidents vary from state to state, but generally any claim payment over $1,000 is considered a major accident. A minor accident is unlikely to result in a surcharge.

If you have damage to your own car and make a collision claim, it's likely the repair costs will be considered major damage. The average collision claim payment is $5,256 for vehicles manufactured between 2014 and 2016, according to the Insurance Information Institute.

Insurance companies typically look at your motor vehicle record from the past three to five years when setting rates. If you cause a car accident in states like California, New Jersey, New York or Texas, insurance companies can surcharge you for only accidents from the past three years. If you cause an accident in states like Massachusetts, insurance companies can review your driving record from the past five years.

We looked at rate increases in three states for a driver who caused an accident with no injuries. Because rates vary widely among companies no matter what’s on your driving record, it’s important to compare prices among multiple insurers.

Car insurance rate increase after an accident (annual rates)

  California Florida Texas
Avg. before accident $1,308 $1,524 $1,452
Avg. after accident $1,848 $2,040 $1,992
% increase 41% 34% 37%
Source: EverQuote, based on user-reported reported premiums for policies with liability amounts of 100/300/50, collision, comprehensive and uninsured motorist coverage. Rates after an accident are based on drivers with one at-fault accident with no injuries. Your own rates will be different.

If you're considering accident forgiveness, you'll want to weigh the cost of the coverage versus the potential rate increase for the next three to five years if you or a driver on your policy causes an accident. Your insurance agent can tell you what the possible surcharges are and how long they last.

Methodology for rates after an accident
Rates are for informational purposes only. Your rates will be different. We analyzed rates among large insurers in five ZIP codes per state. We looked at rates for a driver with a clean record vs. rates after an accident with more than $2,000 in property damage. Rates are for a single 30-year-old male with a 2017 Honda Accord. Coverage included 100/300/50 in liability, uninsured motorist insurance, and collision and comprehensive insurance.