A category motion lawsuit filed in Texas alleges GEICO doesn’t abide by its Accident Forgiveness program when a driver with an unblemished document will get into a primary, at-fault accident.
Texas resident Christopher Cude sued GEICO on Feb. 25, alleging the insurance coverage service raised his auto premium 91% after his spouse acquired right into a minor fender bender accident in October 2024 at which she was at fault. Cude had certified for GEICO’s accident forgiveness profit upon his Might 2024 auto insurance coverage renewal. GEICO stated it could waive the surcharge related to the primary at-fault accident attributable to an eligible driver on the couple’s coverage.
When Cude acquired a coverage renewal letter in November, he realized his premium elevated from $1,358 to $2,664. Cude reached out to GEICO for an evidence of the premium enhance and to remind GEICO that he had Accident Forgiveness. A GEICO consultant advised him that his premium didn’t enhance, however as a substitute, the service merely utilized a surcharge, the lawsuit alleges.
The category motion accuses GeICO of misrepresenting it could not enhance the premiums for its insured with accident forgiveness because of first at-fault accidents. The lawsuit alleges GEICO violated the Texas Misleading Commerce Practices Act and the Texas Insurance coverage Code.
“In its scheme to unlawfully induce customers to buy its Auto Insurance coverage, GEICO unjustifiably and artificially will increase its insurance coverage premiums for its clients with Accident Forgiveness protection by characterizing it as a “surcharge” or different synthetic time period,” the lawsuit says.
GEICO didn’t reply to a request for remark.
GEICO’s web site says a buyer’s insurance coverage fee gained’t go up because of a primary qualifying accident. If there are a number of drivers on a coverage, any of the eligible drivers could use this profit as soon as; after an eligible driver makes use of it, the profit is now not obtainable for that coverage, the web site states.
Drivers should meet sure standards to qualify for accident forgiveness, together with:
- The coverage has been insured with GEICO for five years or extra
- At the least one driver on the coverage has 5 years driving expertise
- There have been no different qualifying claims inside final 5 years
- Age necessities could range by state
GEICO has seen a reversal of fortunes in underwriting lately.
The carrier last month said it earned 2024 underwriting revenue earlier than taxes of $7.8 billion, greater than double the $3.6 billion it earned in 2023. GEICO skilled an almost $2 billion underwriting loss for 2022.
GEICO’s mixed ratio of 81.5 for 2024 was a 9.2 factors enchancment on 2023 and greater than 20 factors higher than 2022.
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