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Updated April 2026 | Insurance Information Institute, NerdWallet 2026

Accident Forgiveness Per Month: $5-$30 Paid or Free at 5-9 Years Tenure

Waives the $3,000 to $5,000 surcharge on the first at-fault accident. Paid version is usually negative expected value for average drivers; positive for households with teen drivers. Carrier-by-carrier mechanics.

Carrier-by-carrier accident forgiveness terms

Progressive

Small Accident Forgiveness automatic for all customers (waives claims under $500). Large Accident Forgiveness automatic at 5+ years continuous Progressive coverage with no claims.

Allstate

Sold as paid add-on for $15 to $30 per month. Available immediately at policy inception with no waiting period in most states. Covers first qualifying at-fault accident.

GEICO

Available as paid add-on for $5 to $20 per month or earned automatically after 5 years of continuous coverage with GEICO. Covers first qualifying at-fault accident.

Liberty Mutual

Earned automatically after 5 consecutive years claim-free with Liberty Mutual. Some states allow paid early enrollment.

State Farm

Earned automatically after 9 consecutive years of State Farm policy tenure. Longest tenure requirement in the industry but free once earned.

USAA

Earned automatically after 5 years claim-free with USAA. Available to military-eligible customers only.

Nationwide

Available as paid add-on. Some states offer earned version after 5 years tenure.

Farmers

Available as paid add-on Signal program. Earned versions vary by state.

Travelers

Available as paid add-on Premier accident forgiveness. Some auto coverage upgrades include it.

The expected value calculation

For a typical adult driver (age 30 to 60, suburban, clean record), the expected value of paid accident forgiveness is negative. The math:

  • Annual at-fault accident probability: approximately 5.5 percent for typical adult driver
  • Surcharge cost if accident occurs: approximately $3,500 over 3 years ($1,167 per year)
  • Annual expected surcharge cost (probability x cost): 5.5 percent x $1,167 = $64 per year
  • Paid accident forgiveness cost: $180 to $360 per year
  • Net expected value: negative $116 to negative $296 per year

For typical adults, paid accident forgiveness is statistically a losing bet over time. The carrier is making expected profit on the premium. The product is sold on emotional appeal (the relief of knowing the first accident is forgiven) rather than financial logic.

The math reverses for higher-risk drivers. Households with teen drivers have approximately 15 to 20 percent annual at-fault probability. At 17 percent probability and $3,500 surcharge cost over 3 years, expected annual surcharge cost is approximately $198 per year, which exceeds the typical paid forgiveness cost. For households with teens, paid forgiveness is often net-positive.

The earned (free) versions of accident forgiveness are always net-positive expected value because they cost zero. For customers with 5+ years tenure at Progressive, Liberty Mutual, GEICO, or USAA, or 9+ years at State Farm, the free accident forgiveness is a meaningful benefit of staying with the carrier vs switching. This is one of the few areas where the loyalty tenure benefit clearly exceeds the loyalty tax cost.

Accident forgiveness FAQs

What is accident forgiveness?⌄
Accident forgiveness is a policy feature that waives the surcharge on the first qualifying at-fault accident. Without accident forgiveness, a single at-fault accident typically raises premium by 41 to 43 percent for 3 to 5 years, totalling approximately $3,000 to $5,000 in extra premium. With accident forgiveness in effect, the at-fault accident does not trigger the surcharge. The first qualifying accident is waived; subsequent accidents in the lookback window are surcharged normally.
How much does accident forgiveness cost per month?⌄
Variable. Allstate sells accident forgiveness as a paid add-on for $15 to $30 per month. GEICO charges $5 to $20 per month. Progressive includes accident forgiveness automatically at no cost for customers with 5+ years continuous coverage. State Farm offers it automatically at 9+ years continuous coverage. Liberty Mutual offers it automatically at 5 years claim-free. USAA offers it automatically at 5 years claim-free. The paid versions are most attractive for new customers with no carrier tenure; the loyalty-based versions are most attractive for long-term customers.
Is accident forgiveness worth the cost?⌄
Run the expected value math. Average annual cost of accident forgiveness as paid add-on: $180 to $360 per year. Expected at-fault accident frequency in the US population: approximately once per 18 years of driving per the Insurance Information Institute, so 5.5 percent annual probability. Expected surcharge cost per accident: approximately $3,500 over the lookback. Expected annual saving from accident forgiveness: 5.5 percent x $3,500 / surcharge years = approximately $40 to $65 per year. The paid accident forgiveness at $180 to $360 per year is statistically negative expected value for the average driver. It is positive expected value for drivers with above-average accident risk (younger drivers, urban drivers, high-mileage drivers, drivers with prior tickets).
Does accident forgiveness transfer if I switch carriers?⌄
Almost never. Accident forgiveness is a carrier-specific feature. If you have State Farm accident forgiveness earned at 9 years and switch to GEICO, the GEICO policy does not include accident forgiveness unless you specifically add it (paid) or earn it at GEICO (5 years). This is one reason carrier loyalty has some financial value: the accident forgiveness benefit accumulates with tenure and is lost on switch. The trade-off vs the loyalty tax: weigh the value of accident forgiveness against the price competitiveness of switching.
What is the difference between small and large accident forgiveness?⌄
Progressive distinguishes Small Accident Forgiveness (automatic for all customers, waives surcharge for claims under $500) from Large Accident Forgiveness (5+ years tenure required, waives the first major at-fault accident). Most other carriers do not distinguish; their accident forgiveness applies to a single first qualifying at-fault accident regardless of size. Small accident forgiveness is essentially universal; large accident forgiveness is the differentiator that matters for serious claims.
Does accident forgiveness apply to DUI?⌄
No, in every case. Accident forgiveness is for at-fault accidents not involving alcohol, drugs, or other major violations. DUI convictions are excluded from accident forgiveness at every carrier. The DUI surcharge applies regardless of accident forgiveness status. Similarly, hit-and-run, reckless driving, and racing convictions are excluded. The forgiveness covers ordinary at-fault accidents (rear-end collision, intersection collision, parking lot incident), not the more serious violations.
Should I buy accident forgiveness if I have a teen driver?⌄
Often yes, even at the paid cost. Teen drivers have approximately 3 to 4 times the at-fault accident rate of experienced drivers. The expected value calculation shifts dramatically: a household with a teen has approximately 15 to 20 percent annual probability of an at-fault accident (vs 5.5 percent for the typical household). At 20 percent annual probability and $3,500 expected surcharge cost, the expected annual saving from accident forgiveness is approximately $230 per year, well above the typical $180 to $360 paid cost. For households with teens, paid accident forgiveness is often the right call.

Related

After at-fault accident
The 41-43% surcharge it waives
Premium increase after claim
Full surcharge schedule
Teen driver per month
When paid forgiveness pays off
State Farm per month
9-year tenure forgiveness