How Car Insurance Rates Change After an Accident

Allstate and Nationwide have competitive accident forgiveness discounts, while Liberty Mutual offers the best overall accident insurance options.

UPDATED: Sep 30, 2022Fact Checked

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Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Written by Sara Routhier
Director of Outreach Sara Routhier

Cynthia Lanctot is an insurance professional with ten years of industry experience. Cynthia is licensed in several states, and holds an associate in claims law, as well as a bachelor’s degree in English. Cynthia’s experience includes the New England and Northeast states. She currently works as a liability claims professional and an occasional online contributor.

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Reviewed by Cynthia Lanctot
Licensed Agent Cynthia Lanctot

UPDATED: Sep 30, 2022

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A Concise Overview

  • The most affordable auto insurance companies after an accident are State Farm and GEICO
  • The best personal accident insurance company after an auto collision is Liberty Mutual
  • The best car insurance companies with accident forgiveness are Allstate and Nationwide, although their average rates tend to be higher

An at-fault accident can double your insurance rates, but that’s not the only financial risk drivers take on after an accident. Auto collisions come with unforeseen costs, especially when it results in death or severe injury.

Drivers pay an average of $30,000 for minor injuries after a collision. Your costs jump to over $100,000 for a debilitating injury and into the millions for accidental death. You may consider investing in additional types of insurance coverage that can save your rates from going up or pay for things like hospital care and physical therapy.

The best accident insurance you can invest in is accident forgiveness auto coverage, personal accident insurance, and accidental death and dismemberment (AD&D) insurance.

Supplemental accident insurance policies like these will cover some of the expenses a standard auto policy doesn’t. This guide discusses what’s covered by accident insurance and compares different types of coverage from the best accident insurance companies, including accident forgiveness and personal accident coverage.

The Best Accident Insurance Companies

Accident forgiveness car insurance is a type of policy add-on that stops your rates from going up after an at-fault accident. Buying accident forgiveness will raise your annual insurance rates by 3%-6%. Fortunately, many auto insurance companies automatically add this coverage to your policy for free after you remain claim or accident-free for a certain number of years.

We found that Allstate and Nationwide offer the best accident forgiveness based on availability and depth of coverage. Both allow for multiple accidents on a policy, although Nationwide insurance rates are cheaper.

Best Accident Forgiveness Car Insurance: Allstate Platinum

Allstate accident forgiveness is only available with the more expensive Your Choice policies, and you won’t qualify unless you’ve remained accident-free for at least nine years. However, Platinum policies offer unlimited accident forgiveness, and drivers can still keep their safe driving discounts after an at-fault accident.

You can opt for a less expensive Gold Policy, which forgives one accident every three years, but your rates will still be higher than average.

Best Accident Forgiveness For Multiple Accidents: Nationwide

Having more than one car accident on your record can make you a high-risk driver. Fortunately, Nationwide is one of the only auto insurance companies that forgives multiple accidents without a tiered policy.

Nationwide accident forgiveness allows for minor accidents (up to $1,500) and two at-fault accidents every three years. It also comes with more affordable rates than Allstate.

Best Accident Insurance: Liberty Mutual

Personal accident and AD&D insurance are types of supplemental coverage that pay for medical bills, funeral costs, and more if you’re seriously injured or killed in an accident, including auto collisions. Group policies are typically available through your employer, although some companies offer coverage as part of life or health insurance.

Very few insurance companies provide stand-alone accident insurance, but Liberty Mutual sells individual personal accident policies. Coverage includes accidental death and dismemberment insurance. Typically, AD&D is purchased separately, but Liberty Mutual offers up to $50,000 with personal accident insurance.

Liberty Mutual accident insurance also pays out directly to policyholders, not the hospital or your physician. This means customers get cash to use toward their most important expenses after an accident, whether that is physical therapy, grocery delivery, or extended hospital stays.

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How Auto Insurance Rates Change After an Accident

Having just one accident on your record will add insurance points to your license. Companies use these points to determine your insurance rates — having more points means paying more for auto insurance.

Take a look at the chart below to see how much a single at-fault accident, or other traffic violation, can raise your rates.

State Farm and GEICO offer the cheapest rates after an accident, but GEICO raises your rates much higher after an accident. For example, State Farm’s rates only increase by around $200 per year, while GEICO’s jump $500 or more.

Despite offering the most competitive accident forgiveness programs, Allstate and Nationwide have higher-than-average rates. However, Nationwide will not raise your rates nearly as high as some other companies after an accident.

You will not see any rate increases after your first at-fault accident if you buy accident forgiveness. All companies on this list offer accident forgiveness, but these programs are not created equal. Scroll through the following section to compare accident forgiveness car insurance companies.

Auto Insurance Companies That Offer Accident Forgiveness

The top 10 insurance companies in the country all offer accident forgiveness to their customers, but each comes with its own restrictions and requirements.

For example, most companies require customers to maintain a good driving record for a certain number of years before accident forgiveness is even an option. Some insurers also only forgive one accident — your first accident — while others forgive multiple accidents on a three-to-five-year basis.

Depending on your driving record, you may not be eligible for accident forgiveness. The table below lists the coverage details and requirements from car insurance companies that offer accident forgiveness. Keep reading to find out where you qualify for coverage.

Auto Insurance Companies with Accident Forgiveness Coverage
Insurance CompanyAccident Forgiveness Coverage
Allstate- Coverage only available with Your Choice policies: Gold or Platinum
- Gold policies forgive one accident every three years
- Platinum policy accident forgiveness is unlimited
- Rates will not increase after an at-fault accident
- Drivers will not lose the good driver discount
American Family- Must maintain a clean driving record for 12 months to qualify
- Must have no more than one (1) at-fault accident on your record to qualify
- Rates will not increase after an at-fault accident
- Coverage only applies to the first at-fault accident
- Drivers will not lose the good driver discount
Erie- Must be an Erie customer for three years or more to qualify
- Rates will not increase after an at-fault accident
- Coverage only applies to the first at-fault accident
- Coverage doesn’t apply on policies with Erie Rate Lock
Farmers- Must maintain a good driving record to qualify
- Coverage applies to one accident every three years
- Rates will not increase after an at-fault accident
- Coverage allows for unlimited fender bender forgiveness (under a certain cost threshold)
GEICO- Must be accident-free for five years to qualify
- Coverage applies to one accident every 3-5 years (depending on state law)
- Rates will not increase after an at-fault accident
- Drivers will not lose the good driver discount
The Hartford- All drivers on a policy must remain accident-free for five years to qualify
- Rates will not increase after an at-fault accident
- Coverage only applies to the first at-fault accident
Liberty Mutual- Must remain accident-free for five years to qualify
- Rates will not increase after an at-fault accident
- Drivers will not lose the good driver discount
Nationwide- Must be a customer for six months to qualify
- Coverage applies to two minor violations and two at-fault accidents every three years
- Coverage allows for unlimited fender bender forgiveness up to $1,500
- Rates will not increase after an at-fault accident
- Drivers will not lose the good driver discount
Progressive- Must be a customer for six months to qualify for up to $500 in coverage
- Must remain claim-free for five years for high-cost accident forgiveness
- Rates will not increase after an at-fault accident
State Farm- Must be a customer and maintain a claim-free record for nine years to qualify
- Rates will not increase after an at-fault accident
- Drivers will not lose the good driver discount
- Coverage applies to one accident every nine years
Travelers- Must be a customer and remain accident-free for five years to qualify
- Coverage applies to one accident every three years
- Rates will not increase after an at-fault accident
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Accident forgiveness is not available in every state, and coverage can vary from company to company, depending on where you live. If you’re interested in adding accident forgiveness to your policy, compare quotes from these and local companies in your neighborhood to find the most affordable coverage.

Will accident insurance cover additional costs after an auto collision?

Accident forgiveness will not cover medical costs or repair bills. This kind of insurance only stops your rates from increasing after an accident. You will need additional accident insurance or medical coverage to protect you from paying out of pocket.

Health insurance, personal injury protection (PIP), or medical payments (MedPay) coverage will pay for loss-related medical bills following an auto accident. If you don’t carry this insurance, you may want to buy accident insurance to cover any additional personal costs after an accident.

Accident insurance typically includes personal accident and accidental death and dismemberment coverage.

What is personal accident insurance?

Personal accident insurance, sometimes called supplemental accident insurance, is designed to cover the unexpected costs of accidental death or injury.

Unlike disability insurance, you can file a claim with accident insurance even if you’re still able to work. Policies typically pay out directly to customers so money can be used toward any type of care.

Personal accident insurance can pay for the following:

  • Ambulance and emergency care
  • Surgeries
  • Hospital admissions and extended stays
  • Outpatient therapies
  • Funeral and burial expenses
  • Lost wages
  • Transportation
  • Day care
  • Groceries

You may also need coverage for specific injuries, including concussions, eye injuries, or burns that require specialized treatment not always covered by health insurance. Personal accident insurance can help cover these costs, so you aren’t struggling to pay expensive medical bills while you recover from an accident.

Coverage also applies to many kinds of accidents, including auto collisions, although some companies may have restrictions on workplace accidents.

What is AD&D insurance?

Accidental death and dismemberment insurance covers exactly what it says it does — the policy pays out if you die, lose a limb, or are paralyzed due to an accident. Coverage also applies if you lose a sensory function like hearing or sight.

However, AD&D insurance has many restrictions, including which accidents it covers and how much your beneficiaries receive. For example, you may only receive 50% of your payout if you lose one limb but 100% if you lose two or more.

What’s the difference between accident and AD&D insurance? AD&D coverage applies specifically to accidental deaths or injuries, while personal accident insurance pays for much more.

AD&D is also a rider added to existing accident, health, or life insurance policies for an additional fee and cannot be purchased alone. Liberty Mutual is one of the few insurers that offer AD&D as part of personal accident insurance.

How much does accident insurance cost?

If you buy personal accident insurance, monthly rates are between $5 and $50. Rates increase if you choose higher levels of coverage or want to include a more extensive list of covered accidents in your policy.

You can buy AD&D riders from your life or health insurance company for around $10 per month. Rates will be higher if you’re older or have a high-risk career or hobbies.

You might save money buying accident insurance from Liberty Mutual, which combines personal accident and AD&D coverage in one policy. However, Liberty Mutual auto insurance rates are more expensive than average, and you may not need this additional coverage if you have adequate health or life insurance.

How to Get the Best Accident Insurance

If your current insurer doesn’t have accident insurance or accident forgiveness, shop around and compare policies online to find the best accident insurance company near you.

The easiest way to get the right accident insurance policy is to ask yourself how much coverage you really need and weigh the pros and cons of each policy type. This way, you know what you’re looking for when you start shopping for affordable companies and comparing insurance quotes online.

Follow the steps below to research the best accident insurance companies.

Consider the Pros and Cons of Accident Forgiveness

Accident forgiveness can save you money on car insurance after your first accident, but consider the pros and cons before deciding to buy coverage.

Pros and Cons of Accident Forgiveness
ProsCons
Prevents your rates from increasing after an at-fault accidentNot available in every state
Avoid paying accident surcharges on your policyNot available with every insurance company
Some companies allow unlimited fender bendersCoverage typically applies only once -- your first accident
Drivers must remain accident-free for at least three years to qualify
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Accident forgiveness highly depends on where you live. Coverage isn’t available everywhere, and other limitations can apply. For example, California insurance laws forbid companies from offering this coverage anywhere in the state. In North Carolina, statutes can restrict forgiveness to accidents less than $1,800.

You may also wonder if you really need accident forgiveness if you haven’t been in an auto collision in the past three years or more. This is one of those “just in case” types of coverage — it’s an excellent way to supplement coverage when adding a new or teen driver to your policy, but it may be irrelevant if you’re a good driver who rarely files insurance claims.

Ask the Right Accident Insurance Questions

Is personal accident insurance necessary? This is an important insurance question to ask yourself as you shop around for auto and accident coverage. It will help you determine how much coverage you need.

Personal accident insurance can be helpful because most companies pay cash directly to policyholders, giving you the freedom to pay for necessities while your medical coverage pays for hospital bills.

You might want this coverage if you don’t have health or life insurance, but you likely don’t need it if you live in a no-fault state that requires PIP or MedPay. You also won’t need AD&D insurance if it’s already included with your life insurance policy.

Compare Insurance Quotes Online

You can start looking for affordable companies once you know the kind of policies you need. Take advantage of free online comparison tools like the one above to get insurance quotes from multiple companies in your area.

Getting accident insurance quotes online gives you the chance to compare multiple companies side-by-side to see which can offer you the best coverage at the best price.

For example, you may find that a local insurer offers a better accident insurance package than Liberty Mutual or more affordable accident forgiveness than Allstate. Don’t settle for the first offer you receive, and take time to compare at least three companies.

Switch Insurance Companies

If you find a better price for the policies you need, then it’s time to switch insurance companies. Call your current insurer to cancel coverage, but make sure your new policies start just as your old coverage ends. If not, you risk driving without insurance, which can result in tickets and fines. You may even lose your driving privileges.

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What You Need to Know About the Best Accident Insurance Companies

Accident forgiveness and accident insurance are not the same types of coverage, but both policy types can help you save money after an auto collision.

Accident forgiveness stops your car insurance rates from going up after an accident. Allstate and Nationwide offer the best accident forgiveness packages, but you will pay more for coverage.

Liberty Mutual is the only auto insurance company offering personal accident insurance as a standalone policy with AD&D coverage. If you are an existing Liberty Mutual customer, you can bundle your auto and accident insurance policies for additional discounts.

Liberty Mutual also offers accident forgiveness, but its package doesn’t come with as many perks as Allstate, Nationwide, or other companies, and its rates are more expensive. You may find better prices for accident insurance with a local company in your neighborhood, so take advantage of our free tools below to get free quotes and find affordable coverage.

Frequently Asked Questions

What is accident forgiveness?

Accident forgiveness is an insurance add-on that stops your auto rates from going up after your first accident. Most companies allow you to keep your safe driver discount with this coverage.

Should I get accident forgiveness?

If you live in a busy city, have a long commute, or are adding a new or teen driver to your policy, accident forgiveness can help you save money on minor fender benders and your first at-fault accident. However, it isn’t necessary if you don’t drive very often or have a good driving record.

How do you qualify for accident forgiveness?

Only drivers who remain claim-free and accident-free qualify for accident forgiveness. Most companies want drivers who haven’t had any accidents in at least three years, while other insurers make drivers wait as long as nine years to qualify for coverage.

Can you add accident forgiveness after an accident?

No, you are not eligible for accident forgiveness if you were recently in an accident. Companies only accept drivers who remain accident-free for three years or more.

How long does it take for accident forgiveness to reset?

Most insurers wait 3-5 years to reset accident forgiveness after one accident, but restrictions vary by company. For example, Nationwide allows drivers to have two at-fault accidents every 3-5 years.

If you’re concerned about how long it takes accident forgiveness to reset, shop around and compare quotes from multiple companies

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