What is Accident Forgiveness Insurance
Ontario’s auto insurance marketplace is, though heavily regulated, a free and competitive market. Insurance companies have remarkable leeway in the prices, products and premiums they offer, as long as these receive provincial approval. Once approved, a company stays bound to those procedures until new proposals get the green light. Accident forgiveness is a product some insurers offer to attract auto insurance consumers worried about blemishes on their clean driving records.
What Is Accident Forgiveness?
On the surface, accident forgiveness promises to remove the potential rate increases that follow an at fault accident in return for a small monthly fee.
Typically, after an accident a driver causes, their insurance premiums go up, since they are now a demonstrated risk and the insurance company partially recoups what they paid in claims for that accident.
In essence, accident forgiveness coverage simply puts that rate increase ahead of the accident. Collecting premiums for an accident forgiveness endorsement raises the cost of the current policy. After the first at-fault accident, the endorsement is no longer needed, of course, so the driver should actually see insurance premiums drop after an accident that qualifies
Who has Accident Forgiveness?
Accident forgiveness is an optional insurance product. Those who have coverage have either chosen to add this endorsement, or it was part of an auto insurance package offered by the insurance company. It is not a part of the standard Ontario basic auto insurance policy.
Problems with Accident Forgiveness coverage
Because of that freedom that Ontario insurers have, there’s no standard accident forgiveness format. Reading the fine print of each company’s offering should be high on the list of any motorist considering this coverage. That fine print defines the precise circumstances around an incident that affect the driver where accident forgiveness applies.
For example, an insurance company may have minimum periods of time or clean driving before accident forgiveness takes effect.
It’s important to realize that, although there may indeed be benefits to a driver, accident forgiveness is a marketing gimmick, and not all insurance companies use the same rules.
Accident forgiveness isn’t necessarily transferable. Should a driver move between insurance companies, perhaps receiving a better rate from the new insurer, they may need to qualify all over again under the new company’s rules.
Another point that many drivers miss is that non-at fault accidents may not impact a driver anyway, whether accident forgiveness is on their policy or not. It’s important to know how fault gets allocated after an accident. A determination by police may have no influence on an insurance investigation. As part of the hybrid no fault/tort-based system in Ontario, insurance investigators apply one of about 40 standard scenarios to every accident they assess. These scenarios determine fault assignment, placing it all on one driver or splitting it between both. Even if you’re not charged by police, you may be assigned fault by insurers.
The base price of your insurance is the most important factor when choosing options. If you’re paying the lowest basic cost, you can more easily consider options such as accident forgiveness. Try Quote Finder’s car insurance calculator to locate your lowest rates. Simply select ‘car insurance’ from the drop-down box at the top of the page. In less than 5 minutes, you’ll have your best rates.