There are many marketing techniques that major car insurance companies use. Accident forgiveness is a policy practiced by many car insurance companies, and it rewards drivers for staying loyal to certain agencies, and for good driving records over a period of time.
Accident Forgiveness in Car Insurance, In a Nutshell
Simply put, accident forgiveness is when car insurance agencies choose to ignore the first at-fault accident of a client's in a certain period of time (making it so that car insurance premiums do not rise when a client is involved in his or her first accident in a specified number of years). An example of this type of insurance benefit is Nationwide's policy where clients who have been with the agency for at least five years and remained accident free for the past 3 years are eligible for benefits, which entail no jump in car insurance rates upon the first at-fault accident.
Many other insurers will require five years of clean driving before eligibility, and Allstate even has a type of monthly insurance that allows drivers multiple accidents, although a small jump in premiums must be paid throughout coverage.
Accident Forgiveness Program as a Marketing Strategy
People who have relatively clean driving records are drawn to major insurers that offer policies such as accident forgiveness. Most of these programs do not require any extra insurance at all, but a driver is simply rewarded for good driving in the past upon his or her first accident in a certain amount of time.
Major insurance companies are able to cover rare accidents involving safe drivers, although many people who are persuaded to switch insurers by the enticing benefits of the program do not qualify because a long period of perfect driving is required for eligibility. Therefore, whether or not clients actually receive benefits, drivers will often switch to major insurers that offer accident forgiveness.
Controversy Surrounding Accident Forgiveness
Although it was created as a marketing program, the benefits of which are enticing to many drivers, there is a substantial population that feels that the policy rewards bad drivers, which, in a sense, it does. Allstate's accident forgiveness plan in particular, which allows people to buy its benefits by paying a slightly higher premium rate, insures people following claims on up to a certain amount of accidents without raising rates. Essentially, this encourages, or at least it does not actively discourage, unsafe driving habits.
Accident forgiveness can be very helpful for drivers who do have safe driving habits and clean records, as insurance agencies will ignore rare accidents on occasion for these drivers. However, there are certain aspects of the program that are highly debated.
Accident Forgiveness and Car Insurance
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