If you have auto insurance in Texas, you have probably heard insurance companies making claims that they will forgive your first accident.  That is right.  I said many Texas auto insurance companies will forgive your accident.  Before you run to the nearest parking lot and hit back into your neighbor’s car, you’d better check the fine print.

Each company has a different definition of accident forgiveness.  Here are a few questions to ask when your auto insurance company says that they will forgive your accident.

1. What’s the threshold? Some Texas Insurance companies will forgive all your accidents under a $400 or $500 payout.  So if you bump into your neighbor’s car and they insist on calling your insurance company, low cost claims under $400 will be completely forgiven.  As a result, your rates won’t change.
2. Will I lose any discounts? Some Texas auto insurance companies like to play games with the accident forgiveness.  Their pricing is so complicated that even if they forgive an accident, you still lose an accident free discount.  As a result, even though they forgave your accident, you still got a rate increase because you lost the accident free discount.  Is that confusing or what?
3. Do I pay more for accident forgiveness?  Some car insurance companies actually make you purchase a higher level of coverage so that you can get “unlimited” accident forgiveness.  This may be a good package if you have a teenager with a bad driving record.  However, if you have a clean driving record, I thought the purpose of the exercise was to save money on your car insurance.  So if your agent says that you have the Gold or Platinum package, you might want to continue looking around.
4. How long does it take to earn accident forgiveness? Some auto insurance companies offer accident forgiveness only been claims free or “surcharge” free for a number of years.  While other companies offer accident forgiveness after you have been insured with them for a number of years without an accident.  Each Texas insurance company has their own version of earning accident forgiveness.

Accident forgiveness can be an extremely useful tool on your Texas auto insurance policy.  As we previously mentioned, each company has different definitions for their accident forgiveness and claims free discounts.  The next time you shop for insurance in Texas, these four questions can go a long way into helping you decide which insurance company and insurance agent is best for you.