When insureds suffer a loss in most of the insurance market, they expect their rates to go up. However, insureds' expectations are changing in the ultra-competitive auto insurance segment.

The proliferation of accident forgiveness policies by auto insurance companies has more and more drivers feeling that they shouldn't be charged more just because they get in an accident.

Sometimes these people end up being disappointed since most carriers have multiple restrictions on who is actually eligible to have an accident forgiven.

However, at least one carrier has steered pretty close to offering permanent accident coverage.

Last year, Erie Insurance Co. came out with a rate lock product that will keep rates steady regardless of accidents. With Erie's product, the only things that will change rates is adding or removing a vehicle, adding or removing a driver, or changing the address where a vehicle is garaged.

"Given today's uncertain economy, what we heard from our customers was a desire for predictability with their auto insurance coverage," said Ann Zaprazny, senior vice president, East Region, Erie Insurance, when the product was launched. "So we decided to take accident forgiveness to the next level and give our customers the opportunity to lock in rates indefinitely unless they make one of three changes to their policy."

This is definitely not the industry standard, but it shows where the market could be headed as carriers try to one-up each other in an effort to both pull in new accounts and hold onto the ones they have.

Travelers has a product that might be closer to the rest of the industry, though the company notes it , unlike many other carriers, does not charge anything extra for the accident forgiveness coverage.

Travelers offers accident forgiveness for free to its insureds who have been with the company for four years and free of accidents for at least five years. If the insured then has an accident, the time period is reset and they would be eligible for another "free accident" after the next five years.

"It's truly an earned benefit," said Bill Pearse, vice president of auto product strategy and design for Travelers. "We're different in that there's no surcharge for it."

Pearse said that Travelers launched its accident forgiveness product a couple of years ago after seeing interest from both customers and agents. At the time, some competitors were offering the product already, causing agents to ask why Travelers wasn't offering it, too. So the company developed a plan that made fiscal sense.

"If an individual has been with us for four years, that's really kind of the tipping point for us to be able to waive that next accident," Pearse said.

The product is available nationwide, and Pearse said it has been received quite favorably by both agents and insureds though the two groups look at it from slightly different perspectives.

"We've had a lot of positive agent and customer response from it," Pearse said. "Customers don't appreciate it necessarily until they have a loss."

Agents appreciate the ability to offer this product to potential policyholders, especially when Travelers can offer so many other products. It's always easier for agents when they are able to work with major carriers that can offer a type of one-stop shop.

Pearse said the company has been very happy with the results of the product and does not anticipate any changes in the near future.

Right now the accident forgiveness product is only available for personal lines auto coverage, but Pearse said Travelers is always evaluating and did not rule out the possibility of making it available for business risks at some point in the future.

Liberty Mutual offers a product that is similar to the one from Travelers though there are a few more restrictions. The carrier requires five accident-free years before insureds become eligible. The Liberty Mutual product is available nationwide, except in California and North Carolina.

Most other national insurers offer coverage, too, with varying degrees of eligibility. For instance, Nationwide sells accident forgiveness coverage but offers a 10 percent discount on the coverage if a driver has at least five years of driving experience and have not been charged with an accident in five years. The carrier will even offer the accident forgiveness coverage to teen drivers, but the discounts are not be available for them.

Progressive offers accident forgiveness coverage to insureds who have been with the company for four years and free of accidents for three consecutive years. The company does not charge for the coverage, but it applies to the first accident only after the listed time frame.

Allstate also offers this coverage nationwide, but has been forced to make adjustments. About a year ago, the insurer made changes to the way the coverage was offered in California. It is still available in the state, but coverage is limited and may affect the 20 percent "good driver" discount.