Kanetix Forum

My question is why is it a driver has a good record for over 20yrs has a first time accident and you get penalized and your monthly rate gets doubled, this is not fair at all what happen to forgive for your first accident? If I lose my job I wont be able to afford car insurance at all because I'm paying double the amount and it's only my first accident ever!!!! THIS IS REALLY VERY UNFAIR & MEAN!!!!!!

Hi,

Insurers recognize that good people make mistakes. One accident in 20 years should be forgiven and there are options for people like you prior to an accident occurring. The first is that rates are often based on a 6 year basis. Insurers only look at your claims history, good or bad, for the past 6 years. This is a good thing for you today in a sense that you will only be charged for your accident for the next 6 years and not for the next 20 years. The negative side is that your 20 years of good driving was not rewarded so your point is quite valid.

The second, and most important point in my mind, is that you were not forgiven for your first accident. Most insurance companies offer a combination of accident forgiveness and/or accident waiver. Let me explain the difference. Accident forgiveness usually kicks in when you have been claims free for the past 6 or more years. The insurer will penalize you on your first accident, but only a little bit.

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They would not drop your rating from a 6 star to a 0 star, they will just drop you to a 5 star. This usually raises your rated between 10% to 15%. This is usually a free coverage and most insurers offer this currently. The next coverage is an accident waiver. This coverage usually costs around $50 or so annually and completely forgives your first accident in the sense that your rates will not go up due to this accident, unless you leave your company and go to another insurer. This is an optional coverage and would be offered by your broker or agent.

Best regards,
Sean Graham, Principal Broker at KTX Insurance Brokers