It might be the best financial question you ask yourself all day.

Do you have Accident Forgiveness?

Some insurance companies make you buy it, some make you earn it .

Most will only include Accident Forgiveness if you have a perfect, or near-perfect driving record.

Some will only apply it if you’ve been with them for a certain amount of time.

If you have an at-fault accident, the insurance company will not apply the surcharge your policy.

In insurance terms, I’ve read somewhere that average, annual Massachusetts auto insurance premium is $1,600.

Let’s say you are a 99 driver and you get in an at-fault accident.

If total damage is less than $500 paid out (almost never), there is no surcharge.

If damage totals less than $2,000 (minor accident), at-fault driver is surcharged: 3 points.

If damage is more than $2,000 (major accident), at-fault driver is surcharged: 4 points.

The MA SDIP driver rating system is, sort of, difficult to figure out.

The best driver in the state is a 99 (no at-fault accidents, no violations 6+ years). Credit step.

The next best is a 98 (no at-faults, no violations 5+ years). Credit step.

Then you’re a:  0 driver (note: you’re also a 0 driver when you first get you’re licensed.) Neutral driving record.

Points get added starting with 0, for at-fault accidents and violations.

So, for the example above, if you’re in an accident and more than $2,000 is paid out (usually), you go from a 99 to a 4.

Each step is, somewhere, around 8% in annual auto insurance surcharge, so you go from a 99 to 98 to 0 to a 1-2-3- 4. The realized premium increase will be around 48% more at renewal time (+$768) … for the next 3 years! Then it will go down by, maybe, 8% to + $640 in surcharges years 4 and 5. After year 5 you will go back to a 0 driver and you’ll only be paying about +$256 in surcharge.

Approximate surcharge totals:

Year 1: +$768

Year 2: +$768

Year 3: +$768

Year 4: +$640

Year 5: +$640

Year 6: +$256

By the time it’s all over, you’ll have paid out: $3,840 in additional insurance premiums.

If your coverage included Accident Forgiveness, guess what?

No additional premiums.

Take a moment, look at your policy or call your agent.

Do you have Accident Forgiveness?