How does Allstate Accident Forgiveness work?
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UPDATED: Apr 8, 2020
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Allstate is the second-largest insurance company in the country and one of the best-known names in the industry. Although it has a number of things that make it stand out from its competition, perhaps the best-known feature of an Allstate auto insurance policy is the accident forgiveness plan. This feature is advertised heavily in the commercials and many people purchase a policy believing that they will automatically receive the accident forgiveness.
Unfortunately, not all Allstate auto policies have accident forgiveness. In order to qualify, you must purchase a Your Choice Auto policy, which has a unique set of rules and costs more than a regular policy. If you have Allstate or are considering purchasing a policy from them, it’s a good idea to clarify with the agent exactly what type of policy you’re getting and what will be included with it.
What is Accident Forgiveness?
With most insurance policies, your rates increase after an accident. If you carry accident forgiveness, however, your rates will typically not be affected by a collision. In Allstate’s case, there were two different types of accident forgiveness plan when we reviewed their policy at the time of this article: Gold and Platinum. There is a price difference between them, and they work in slightly different ways.
— The Gold plan offers accident forgiveness for the first accident reported under your policy
This means that once you’ve been involved in an accident, you lose the protection. Subsequent accidents may cause your rates to increase. Some agents will move you from Gold protection Platinum protection after an accident so that you can get accident forgiveness for subsequent collisions.
— The Platinum plan provides accident forgiveness for as long as you carry the Platinum protection
In other words, you can have multiple accidents without your rates increasing. After a certain number of collisions, you may no longer qualify for Platinum protection, but your rates will not increase for any accident up to that point.
No matter which type of Your Choice Auto policy you carry, you will also get the benefit of a deductible reduction program. This causes your deductible amount to decrease by $100 each year that you go accident-free after you purchase the Your Choice Auto policy. For example, if you have a $500 deductible, your deductible will be waived after five years of safe driving.
Some states do not allow a complete waiver of deductible. In these areas, your deductible will be reduced to $100 and stay there. Additionally, remember that the waiver only applies to collision and uninsured motorist coverages. Your comprehensive deductible is not affected by the deductible reduction amount.
Once you’ve been involved in an accident, the deductible returns to its original amount and will stay there for one year. You would then need to earn reduction awards again through more years of safe driving. You will only lose the deductible rewards if you file a collision or uninsured motorist claim; comprehensive claims do not affect the deductible reduction amount.
Bear in mind that just because your rates cannot increase as a result of a collision does not mean that your rates won’t go up while you have the policy. For example, traffic violations can still cause a rate increase. If you’re involved in an accident and get a citation for causing the collision, that citation will still affect your rates even though the accident will not.
Is Allstate the Only Company that offers this program?
Although Allstate pioneered the notion of accident forgiveness and deductible reductions, other insurance companies offer similar programs. Depending on your situation, it may be a better deal to obtain coverage through these competitors, or the Allstate policy may be the most affordable.
Nationwide offers a program called Vanishing Deductible which works in a similar fashion to Allstate’s deductible reduction. Through the Vanishing Deductible program, your rates decrease by $100 each year that you go without a collision. Other companies, such as The Hartford, offer similar programs.
Accident forgiveness is also available through companies like Nationwide, Liberty Mutual and GEICO. Each insurance company handles this differently, so be sure to speak with the agent or customer service representative to understand exactly how the accident forgiveness is applied to your policy.
Although certain insurance benefits are advertised more thoroughly by some companies than others, many insurers offer similar coverages. It’s a good idea to comparison shop widely among multiple different companies to get an idea of what your rates might be and what programs are available through each insurance company.
When shopping for a policy, be sure to ask about additional programs and discounts that can affect your base rate. While one company may offer you a low quote, they may not have the best possible discount packages or additional perks. In some cases, it may be worthwhile to go with a pricier insurer to take advantage of more thorough benefits.
No matter what insurance company you decide to use, be sure to discuss your coverages and policy with the agent to ensure you’re getting the policy that you need. If there’s anything you don’t understand, have it clarified before you sign off on the policy. This will help prevent unpleasant surprises from occurring if you ever need to file a claim.