Automotive

The value of accident forgiveness

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Mar 2, 2012
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The value of accident forgiveness

I decided to make a post after I read that some people are suggesting to the OP, who was involved in an accident, to make a claim through the insurance because of $1100 bumper damage. I think that is a horrible advice. If he has a deductible that makes it even worse than just horrible advice.

While ago, in 2005, I was involved in a minor, single car accident. The repair was $1800 and my deductible was $500.

I consider(ed) myself to be a safe driver. This was my first accident after 12+ years of driving so I decided to go through the insurance and give up on my accident forgiveness benefit. Why not, right? I just keep paying for the insurance for all of these years for nothing.
Basically I sold my accident forgiveness claim for $1300.

I assumed that I will earn my accident forgiveness benefit before I get involved (if ever) in the next accident since I am such a careful driver.

My dad, coincidentally, one year later, the same story, the first accident, single car $2200 damage, $500 deductible......why not claim it? Safe and careful driver. We both live in the same house, so it is one policy. You guys already know where I am getting with this.

The following year my dad was involved in 2 car accident where he hit a brand new Lincoln with 25 KM ( I always tell him he did this in style) and we had to claim it through the insurance.

Our premiums skyrocketed rightfully and as per my estimate, we paid over $25,000 extra in insurance premiums until our premiums went down to the lowest rate possible.

We clearly made a mistake when we made those small claims and we gave up our accident forgiveness benefit. I didn't know better at the time.

What is your breaking point, dollar amount when would you pay for the repair out of your pocket and when would you make a claim through the insurance.
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Oct 13, 2007
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jikiji626 wrote: I decided to make a post after I read that some people are suggesting to the OP, who was involved in an accident, to make a claim through the insurance because of $1100 bumper damage. I think that is a horrible advice. If he has a deductible that makes it even worse than just horrible advice.

While ago, in 2005, I was involved in a minor, single car accident. The repair was $1800 and my deductible was $500.

I consider(ed) myself to be a safe driver. This was my first accident after 12+ years of driving so I decided to go through the insurance and give up on my accident forgiveness benefit. Why not, right? I just keep paying for the insurance for all of these years for nothing.
Basically I sold my accident forgiveness claim for $1300.

I assumed that I will earn my accident forgiveness benefit before I get involved (if ever) in the next accident since I am such a careful driver.

My dad, coincidentally, one year later, the same story, the first accident, single car $2200 damage, $500 deductible......why not claim it? Safe and careful driver. We both live in the same house, so it is one policy. You guys already know where I am getting with this.

The following year my dad was involved in 2 car accident where he hit a brand new Lincoln with 25 KM ( I always tell him he did this in style) and we had to claim it through the insurance.

Our premiums skyrocketed rightfully and as per my estimate, we paid over $25,000 extra in insurance premiums until our premiums went down to the lowest rate possible.

We clearly made a mistake when we made those small claims and we gave up our accident forgiveness benefit. I didn't know better at the time.

What is your breaking point, dollar amount when would you pay for the repair out of your pocket and when would you make a claim through the insurance.
I'm guessing that you are the each the principal operator of two separate vehicles. Typically, a premium is paid for each driver for accident forgiveness. You lost yours but technically then, your rating stays the same so there should be no premium difference at that point.

Your dad then uses his accident forgiveness which mans again, there should be no premium increase at that point because everything is now equal. One year later your dad gets in an accident and so there is now really only one at-fault accident on record. I suppose that your premiums could have increased significantly but with impeccable records, there should only have been a moderate increase and I suppose you could have shopped around as well.

Given that your father's second accident was a year later and if it was within a year, you should have taken the opportunity to just pay back that claim and applied the accident forgiveness to the second more substantial claim. Having worked in insurance, I have seen this many times where claims are repaid to return the record to where it was.
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$5k maybe.
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There’s no easy answer to your question. It’s more complicated than just placing an economic value on your accident forgiveness feature and saying above $x,xxx claim and below pay cash to settle.

You have to consider how hard the impact was and what is the chance of getting served with a lawsuit 2 years less a day after it happened. When a $1,000,000 lawsuit shows up you don’t want the first words from your insurance company to be “what accident?”. If you don’t have it on a dash cam then you’ll have no proof that there’s no chance they were injured from a low impact collision.

Further to above, how trustworthy does the other party seem? If they’re saying here’s an estimate so bring cash in $20 bills and we can meet at Tim Hortons to settle? Or are they saying here’s the estimate from a reputable body shop so please meet me when I pick up the repaired vehicle and you can pay the body shop directly? In the pay me cash scenario there’s nothing stopping them from pocketing the cash and still making a claim or that the estimate is even legit. At least in the pay the shop directly scenario you have a proper paper trail.

For me, the above factors would be the primary considerations and the dollar value of the damage would be secondary. Under the right circumstances though, I’d consider avoiding a claim up to maybe about $2,500
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CanadianLurker wrote: There’s no easy answer to your question. It’s more complicated than just placing an economic value on your accident forgiveness feature and saying above $x,xxx claim and below pay cash to settle.

You have to consider how hard the impact was and what is the chance of getting served with a lawsuit 2 years less a day after it happened. When a $1,000,000 lawsuit shows up you don’t want the first words from your insurance company to be “what accident?”. If you don’t have it on a dash cam then you’ll have no proof that there’s no chance they were injured from a low impact collision.

Further to above, how trustworthy does the other party seem? If they’re saying here’s an estimate so bring cash in $20 bills and we can meet at Tim Hortons to settle? Or are they saying here’s the estimate from a reputable body shop so please meet me when I pick up the repaired vehicle and you can pay the body shop directly? In the pay me cash scenario there’s nothing stopping them from pocketing the cash and still making a claim or that the estimate is even legit. At least in the pay the shop directly scenario you have a proper paper trail.

For me, the above factors would be the primary considerations and the dollar value of the damage would be secondary. Under the right circumstances though, I’d consider avoiding a claim up to maybe about $2,500
You get the other side to sign a release when you settle without insurance. Do people actually pay anything without having a release signed?
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starchoice wrote: I'm guessing that you are the each the principal operator of two separate vehicles. Typically, a premium is paid for each driver for accident forgiveness. You lost yours but technically then, your rating stays the same so there should be no premium difference at that point.

Your dad then uses his accident forgiveness which mans again, there should be no premium increase at that point because everything is now equal. One year later your dad gets in an accident and so there is now really only one at-fault accident on record. I suppose that your premiums could have increased significantly but with impeccable records, there should only have been a moderate increase and I suppose you could have shopped around as well.

Given that your father's second accident was a year later and if it was within a year, you should have taken the opportunity to just pay back that claim and applied the accident forgiveness to the second more substantial claim. Having worked in insurance, I have seen this many times where claims are repaid to return the record to where it was.
You can't really shop around with 2 accidents
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haliwood wrote: You get the other side to sign a release when you settle without insurance. Do people actually pay anything without having a release signed?
A release only stops an honest person from reneging. To stop a scammer or dishonest person you’d have to have the release sworn in front of a commissioner of oaths or something similarly formal. If they’re willing to provide identification that you can take a picture of and you record on the release when they sign then you’re probably dealing with an honest person. Otherwise, you risk them saying “it wasn’t me” like Shaggy and your release may not help.

I wouldn’t settle without a release. But I think there have been a few threads here with people not getting a release.
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jikiji626 wrote: I decided to make a post after I read that some people are suggesting to the OP, who was involved in an accident, to make a claim through the insurance because of $1100 bumper damage. I think that is a horrible advice. If he has a deductible that makes it even worse than just horrible advice.

While ago, in 2005, I was involved in a minor, single car accident. The repair was $1800 and my deductible was $500.

I consider(ed) myself to be a safe driver. This was my first accident after 12+ years of driving so I decided to go through the insurance and give up on my accident forgiveness benefit. Why not, right? I just keep paying for the insurance for all of these years for nothing.
Basically I sold my accident forgiveness claim for $1300.

I assumed that I will earn my accident forgiveness benefit before I get involved (if ever) in the next accident since I am such a careful driver.

My dad, coincidentally, one year later, the same story, the first accident, single car $2200 damage, $500 deductible......why not claim it? Safe and careful driver. We both live in the same house, so it is one policy. You guys already know where I am getting with this.

The following year my dad was involved in 2 car accident where he hit a brand new Lincoln with 25 KM ( I always tell him he did this in style) and we had to claim it through the insurance.

Our premiums skyrocketed rightfully and as per my estimate, we paid over $25,000 extra in insurance premiums until our premiums went down to the lowest rate possible.

We clearly made a mistake when we made those small claims and we gave up our accident forgiveness benefit. I didn't know better at the time.

What is your breaking point, dollar amount when would you pay for the repair out of your pocket and when would you make a claim through the insurance.
You're assuming the other party wants to settle, which is not always the case.
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CanadianLurker wrote: A release only stops an honest person from reneging. To stop a scammer or dishonest person you’d have to have the release sworn in front of a commissioner of oaths or something similarly formal. If they’re willing to provide identification that you can take a picture of and you record on the release when they sign then you’re probably dealing with an honest person. Otherwise, you risk them saying “it wasn’t me” like Shaggy and your release may not help.

I wouldn’t settle without a release. But I think there have been a few threads here with people not getting a release.
Witnessing never hurts, and it goes without saying that you'd include their identification in the release or at bare minimum make a copy. But swearing a document isn't going to do anything additional to witnessing. If people reneg, the release is a complete defence. People can try to lie and argue it wasn't them, but I've seen contracts done on napkins with misspelt names upheld in court, even when the signatory died two days later and was suffering from lapses in mental capacity due to cancer.

Sure you'd need to lawyer up for it but its pretty clear cut case. Insurance companies get their clients to sign releases for a payout so you're really in the same boat and face the same risks gf reneging anyway.
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Dec 29, 2013
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I am a bit confused. While we are on the topic of accident forgiveness, what if you are in an accident (at fault until it is fought off at court) and your car (i.e. Car A) is totalled (damage approx ~$12,000). The other car (i.e. Car B) is totalled (damage approx ~$10,000) as well. If CAR A has accident forgiveness, I would think it would be wise to claim it on insurance. But since there are two cars invovled, would accident forgiveness be counted once on Car A's insurnace only? If Car B's insurance going to deal with Car A's insurnace to get an reimbursement, does it count negatively to Car A's insurance - accident forgivness has already been used once on Car A?
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MadMonday wrote: I am a bit confused. While we are on the topic of accident forgiveness, what if you are in an accident (at fault until it is fought off at court) and your car (i.e. Car A) is totalled (damage approx ~$12,000). The other car (i.e. Car B) is totalled (damage approx ~$10,000) as well. If CAR A has accident forgiveness, I would think it would be wise to claim it on insurance. But since there are two cars invovled, would accident forgiveness be counted once on Car A's insurnace only? If Car B's insurance going to deal with Car A's insurnace to get an reimbursement, does it count negatively to Car A's insurance - accident forgivness has already been used once on Car A?
What do you mean by fight it off in court? Because a charge the police give has nothing to do with the insurance deeming fault.

As for the topic, I'm not sure I understand. Does the payout of a claim have an effect on the policy? My understanding is that an at fault accident is what matters in calculating your premium not the amount that was paid out on the claim. If I'm right then any claim would be worth using accident forgiveness, unless it is less than your deductible.
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Hitting a brand new Lincoln with only 25km ...very lucky insurance didn't send your dad a cancellation letter after that one. Damn!
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starchoice wrote: I have seen this many times where claims are repaid to return the record to where it was.
Interesting! I didn't even think that could be an option!?
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Probably $5k before I consider using insurance. I keep my deductible at $1k (or maybe even $2k) because to me, insurance (auto, home or anything else) is to help you through an otherwise catastrophic loss. If you total your car or severely injure another person - losses that would heavily impact your financial future if you had to bear them.

It's like playing the lottery - everyone knows that if you're winning $10, $20, $50, then really the lottery is winning in the long run. You play the lottery for the chance at winning millions that you could never get any other way, to completely change your life for the better. Insurance is like that in reverse, to me. If I own a car, having to pay $1k or $2k is small potatoes. Insurance is there to stop me from changing my life for the worse.
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ncnmra wrote: Interesting! I didn't even think that could be an option!?
I don't think that is even possible because the most of the people will choose to pay off the smaller claim as opposed to paying higher premiums for 7 years or so. I never heard of that option before.
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Manatus wrote: Probably $5k before I consider using insurance. I keep my deductible at $1k (or maybe even $2k) because to me, insurance (auto, home or anything else) is to help you through an otherwise catastrophic loss. If you total your car or severely injure another person - losses that would heavily impact your financial future if you had to bear them.
I agree on this 100%. There was a damage on my truck $4000 ($1000 deductible) and decided not to go through the insurance because of my previous experience explained in my post.
On top of that, my daughter just got her license so I have to save my accident forgiveness for the future date.
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CanadianLurker wrote: You have to consider how hard the impact was and what is the chance of getting served with a lawsuit 2 years less a day after it happened. When a $1,000,000 lawsuit shows up you don’t want the first words from your insurance company to be “what accident?”. If you don’t have it on a dash cam then you’ll have no proof that there’s no chance they were injured from a low impact collision.
Great point, I've never thought of a lawsuit.
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UrbanPoet wrote: How long does it take to get back your accident forgiveness after you use it? Or is it just a one time thing?
Reset comes in 6-10 years but I only based this on questionaire insurance company throw out when you apply for insurance.

Remember, accident forgiveness if basically a way for insurance company to capture business for the next 6-10 years because they know you can't leave. So not only you give away your forgiveness on the claim, you also threw away your ability to shop around for the worse case, next decade.
Last edited by Xtrema on Nov 12th, 2019 4:28 pm, edited 1 time in total.
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Does accident forgiveness go away if you move to a different insurance company?

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