Is there any uglier sound than car metal crashing into car metal?
No doubt about it, an auto accident is traumatic on many levels. Beyond the physical danger and later repair hassles, there's the gut-punch worry that your car insurance premiums will jump, literally adding insult to injury. Depending on the collision, overall driving record and other factors, your costs could rise by 40 percent or more.
Many of us think higher coverage costs are automatic, but that's not really true. "Accident forgiveness" is one of the car insurance discounts that not everyone may be familiar with or fully understand. Most major insurers - including Allstate, GEICO, The Hartford, Liberty Mutual, Nationwide, Progressive and State Farm, among others -- offer it to their best customers.
"For consumers who prefer to hedge against possible premium increases after an accident, the accident forgiveness feature may be a good option," says Stephanie Sheppard, an Allstate spokesperson.
What's the catch?
In general, it works this way: If you have a clean driving record, the insurance company will ignore the first accident and not raise your premium. Further, your deductible could drop by as much as $100 each year you maintain a spotless record after the mishap.
The details, however, vary slightly from company to company: Some may give you accident forgiveness immediately, while others will only do so after you've been an accident-free policyholder for as many as five years. They also may require no moving violations for three years. You'll need to talk with agents and read the fine print.
Once you study that fine print you'll see that this feature is not free, even with a perfect driving history. At Allstate, for example, you get accident forgiveness by upgrading to a Gold or Platinum coverage plan. Gold costs 8 percent more and Platinum is 15 percent higher than a standard policy, according to Sheppard.
With Gold, you need to go three years without a collision to be protected. Accident forgiveness begins immediately with the more expensive Platinum.
Feel lucky? Well, do you?
So, if you're a great driver with no smudges on your record, is it a good idea to pay more for the protection or take the chance that your motoring skills (or luck) will continue?
The Truth About Insurance, a website that is a critic of accident forgiveness, evokes loaded images of a gambling casino while warning consumers to think twice:
"[It's] similar to 'buying' insurance against a blackjack dealer who is showing an Ace face up in Las Vegas. ... It's ultimately a side bet against a bet you have already made, that you are not going to get into an accident. Isn't that what you bought the insurance policy for in the first place -- to cover you against claims for damages arising out of an accident you cause?"
But Consumer Reports, in its "Money Adviser" issue last year, said the add-on is worth considering for some people. "If you're a safe driver with a clean record and pay standard rates, a traditional policy may cost you less," the magazine noted, then added, "If you're already paying more because of accidents or violations, a forgiveness policy may make sense, assuming you're eligible for one.
"And if you have teenage drivers in your household, you may already be paying higher rates to account for the added risk. So even without accident forgiveness, your rates might not go up after your child's first fender bender ... [in the end, be sure to] shop around."
The Insurance Information Institute echoes that advice. Michael Barry, the vice president of media relations for the Institute, points out that the III does not have an opinion on accident forgiveness but it does have a strong position on consumer awareness.
"In our view, the policyholder needs to quiz either their insurance agent or insurance company representative about the pros/cons of accident forgiveness" before buying the provision, he says. "Education, knowing what you have and what you need, is always a great idea."
In your search for the cheapest car insurance, everything comes down to the right protection.