ACCIDENT FORGIVENESS Meaning and
Definition
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Accident Forgiveness is a term used in insurance to describe a feature or policy that protects the policyholder from experiencing increased premiums due to their involvement in an at-fault accident. It is an optional coverage available in some auto insurance policies, designed to offer financial protection and peace of mind to the insured.
With Accident Forgiveness, the insurance company assures the policyholder that their premium rates will not increase after their first at-fault accident, or sometimes even after multiple accidents, within a specified period. This feature is particularly valuable as at-fault accidents commonly lead to higher insurance premiums or even policy cancellation.
The purpose of Accident Forgiveness is to reward safe drivers who have an otherwise clean driving history, extending them a level of leniency for an occasional mistake. It acknowledges that accidents can happen unintentionally, regardless of a person's good driving record. By providing Forgiveness, insurance companies incentivize policyholders to remain loyal customers and maintain their business while also encouraging responsible driving.
It is important to note that Accident Forgiveness is not automatic and usually requires an additional premium. Each insurance company may have specific guidelines and restrictions regarding eligibility criteria, availability, and the number of accidents covered. Therefore, understanding the terms and conditions associated with Accident Forgiveness is crucial before purchasing an insurance policy.
