Car insurance - How much is accident forgiveness worth?

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fsrph
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Car insurance - How much is accident forgiveness worth?

Post by fsrph » Sat Jun 28, 2014 4:25 pm

In my previous thread, http://www.bogleheads.org/forum/viewtop ... 2&t=139189 I considered switching auto insurance from State Farm to Geico. After presenting Geico's quote to the State Farm agent she called back and lowered the yearly quote to about $200 more than Geico. She said altho they can't match Geico's price they do offer me accident forgiveness, where if I had an accident my rates will not rise. How do you value how much accident forgiveness is worth? Is having accident forgiveness worth paying $200 more per year?

Francis
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prudent
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Re: Car insurance - How much is accident forgiveness worth?

Post by prudent » Sat Jun 28, 2014 4:34 pm

I would not pay more for that feature, betting that I would not be in an at-fault accident. I'd want to know under what conditions they can refuse to renew the policy - if they can drop you for any or no reason, what security is there in "accident forgiveness"?

Traveler
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Re: Car insurance - How much is accident forgiveness worth?

Post by Traveler » Sat Jun 28, 2014 4:38 pm

I don't have full coverage on my car (no comprehensive/collision) and I was in a minor accident in an ice storm this winter. The insurance company paid out $1300. My 6-month premium before the accident was $185 and now it is $250. This is with Geico. I wouldn't pay more for accident protection, although the numbers would likely be different if I had full coverage on a newer car.

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Flobes
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Re: Car insurance - How much is accident forgiveness worth?

Post by Flobes » Sat Jun 28, 2014 9:18 pm

I just switched to Geico, effective June 1.

My new insurance includes "Upgraded Accident Foregiveness" coverage. Cost @ $17 for 6 months.

If I have an accident, my new rates won't be at the unknown mercy of an insurance company for some number of years. And my "safe driver" discounts will not disappear. (My most recent accident claim was 1977!) For me, this is important protection and security, which is why I buy insurance.

Call Geico. The phone agent was very helpful. There are a some coverages and discounts that did not appear with my initial online quote, including Accident Forgiveness as well as my 8% discount for owning a single share of BerkshireB.

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pondering
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Re: Car insurance - How much is accident forgiveness worth?

Post by pondering » Tue Sep 10, 2019 6:58 am

Is there an update on how much Bogleheads think accident forgiveness is worth?
--Robert Sterbal | 412-977-3526 call/text, I find speech easier than writing

MikeG62
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Re: Car insurance - How much is accident forgiveness worth?

Post by MikeG62 » Tue Sep 10, 2019 8:25 am

pondering wrote:
Tue Sep 10, 2019 6:58 am
Is there an update on how much Bogleheads think accident forgiveness is worth?
I can only say that my youngest daughter (<25) was involved in an accident last year - her car and another car were totaled in the accident. She was paying ~$1,500 per year before. Got a replacement car and now she pays about $3,300. Coverage is otherwise the same.

She sure wishes she had accident forgiveness.

She’s called around to several other insurers and the quotes she received were all higher than what she is paying now.
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Artful Dodger
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Re: Car insurance - How much is accident forgiveness worth?

Post by Artful Dodger » Tue Sep 10, 2019 8:56 am

Our daughter wrecked her car a couple of years ago. The insurance company totaled it, and we received a check. She switched to a lower cost car, we dropped collision, and while the liability portion was up slightly, the total rate for the new car was half what we were paying previous. To my knowledge we don't have accident forgiveness. We have stayed with this company for 15+ years, and that may come into play.

I would agree with one of the older posts above. The likelihood of being in an at fault accident is pretty low, and I wouldn't pay much of a premium for accident forgiveness.

UALflyer
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Re: Car insurance - How much is accident forgiveness worth?

Post by UALflyer » Tue Sep 10, 2019 10:20 am

pondering wrote:
Tue Sep 10, 2019 6:58 am
Is there an update on how much Bogleheads think accident forgiveness is worth?
Accident forgiveness can mean different things to different insurers. With some insurers, this feature means that they won't surcharge your policy for an fault accident, but you can still lose an accident-free discount, or deductible rewards, etc... So, with some insurers, having "accident forgiveness" on your policy does not actually mean that your premiums won't increase following an at fault accident. You really need to ask each carrier to figure out what "accident forgiveness" means to them.

Regardless of the definition, most people would not be well served by paying extra to have "accident forgiveness" on their auto policies, as they would be essentially prepaying a rate surcharge. Some carriers, however, automatically give you "accident forgiveness" at no additional cost if you've been accident free for 5 years (sometimes it has to be 5 years with that particular carrier).

To me, there's really two situations that come to mind where, depending on the cost, paying for "accident forgiveness" can be a good move. The first one is where you have a relatively high risk driver on your policy, such as a young driver. The second is where "accident forgiveness" is bundled with another attractively priced package of desirable policy features and can't be dropped from it, in which case it's essentially icing on the cake.

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pondering
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Re: Car insurance - How much is accident forgiveness worth?

Post by pondering » Wed Sep 11, 2019 6:14 am

This is how my accident forgiveness is described:

Feature Fifteen applies to your policy. Because you've been a loyal ERIE customer for at least 15 years, no surcharge will applied to your policy for future at-fault accidents.
--Robert Sterbal | 412-977-3526 call/text, I find speech easier than writing

RobLyons
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Re: Car insurance - How much is accident forgiveness worth?

Post by RobLyons » Wed Sep 11, 2019 6:19 am

For us, 2 long term, accident free drivers, it is not worth it. I've found much better rates shopping around and for my purposes, accident forgiveness is just a gimmick. That is, until the kids get older and jump on the policy..
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hayhayday
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Re: Car insurance - How much is accident forgiveness worth?

Post by hayhayday » Fri Sep 13, 2019 4:58 pm

For me it would be worth around 1300 annual premium * 20% expected increase *10% chance of accident (average every ~10 yrs)* 50% chance of being at fault * 3 years accident will be surcharged = ~$39

Momus
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Re: Car insurance - How much is accident forgiveness worth?

Post by Momus » Sat Sep 14, 2019 3:38 am

I swear to never deal any business with statefarm. The fact you have to call them for them to lower your premium says more about them as a company. Stay far away from statefarm. Hope you don't get hit by a statefarm driver or at fault at the accident.

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