What's the difference between a vanishing deductible and accident forgiveness

Kinda seems like they do the same thing. Do I need both? I have a new teen driver (17-year-old son) and we want to maintain the vehicle we're going to let him use. Our agent recommended but I can't tell if he's just trying to rack up his commission. We have Liberty Mutual.

Mar 31, 2018 Portland, Oregon

Ava Lynch

Mar 31, 2018

Let's first summarize the two:

  • Accident Forgiveness with Liberty Mutual: If you're accident-free for five years (with any company), the company will forgive your first accident and not raise your rates. Furthermore, this policy can apply to all members of the household, including teenagers. However, it's still one forgiven claim per household and not per driver.
  • Vanishing Deductible with Liberty Mutual: Liberty Mutual’s disappearing deductible program is called a Deductible Fund and they market it almost like a bank account. Upon signing up for the deductible fund, you earn $100 in the “deductible fund” account which goes to your collision deductible if you file a claim. Then, like other policies, your deductible decreases by $100 each year you haven’t had an accident until your car insurance deductible is $0. You do not need to be accident-free in order to qualify for this program.

Basically, they work together to reduce any cost associated with filing a collision or comprehensive claim.  These policies do increase your premium; however, Liberty Mutual (and any other car insurance company, for that matter) won't advertise how much it will affect your rates. I would ask your agent for a quote on these policies. Then, you should compare what you might expect an at-fault accident would cost you. In 2020 in Oregon, at at-fault accident raised rates by an average of 56%. Consider this value over 3 years, as that's how long most car insurance companies will rate you for. If you're expecting to file a claim because of your young son's driving experience, this might save you some money in the future. But ultimately, the decision is up to you.

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