Anna Bradley-Smith  |  March 26, 2021

Category: Covid-19

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GEICO hit with class action over pandemic insurance charges

Insurance giant GEICO did not “Giveback” to customers as promised and unfairly profited off the COVID-19 pandemic, a new class action lawsuit alleges.

GEICO was named as a defendant the proposed class action filed in California this week by lead plaintiff Jessica Day. Day alleges the company charged exorbitant premiums during the pandemic based on old and irrelevant data, misled customers about passing on savings, and ultimately profited off the pandemic. She seeks to represent a class of California residents she says were also duped by the insurer. 

After receiving advertisements about the GEICO Giveback credit program, designed to pass savings from pandemic-induced shutdowns onto customers, Day says she decided to renew her auto insurance with the company.

With stay-at-home orders in place in California and across the country reducing driving and, in turn, accidents, insurers such as GEICO “scored a windfall,” the lawsuit says. Given auto insurance rates are extrapolated from historical data with the intent of covering the claims and expenses they expect to occur in the future, the data being used to set premiums was irrelevant during the pandemic, according to the class action.

GEICO’s parent company Berkshire Hathaway reported GEICO more than doubled its earnings in 2020 on the previous year, with $3.428 billion pretax, the lawsuit says. Through the GEICO Giveback program, the company pledged to pass those savings on to customers, Day says in the class action.

On Aug. 10, 2020, Day allegedly renewed her policy to last through Feb. 10, 2021, with a premium of $871.20. Day was given a “GEICO Giveback” credit of $130.68, bringing her premium down to $740.52, which was still excessive, the lawsuit says.

“Plaintiff renewed her policy and did not cancel her policy with GEICO based on GEICO’s failure to disclose to its customers the fact that the ‘GEICO  Giveback’ did not, in fact, pass the company’s savings on to its customers,” the lawsuit alleges.

If GEICO had been transparent about the program, which applied a 15 percent discount on new and renewal auto insurance policies from April to October 2020, its “excessive profits caused by COVID-19” and the fact that its premiums are not based on an accurate assessment of risk during COVID-19, as alleged in the lawsuit, Day would not have renewed her policy.

The class action says GEICO’s refund program received a “D-” grade from the Consumer Federation of America, placing it at or near the bottom of insurers receiving grades.

“The company’s short-lived “GEICO Giveback” program was woefully inadequate to compensate its customers for overpayments resulting from COVID-19,” the class action alleges. A report cited in the lawsuit says refunds of paid premiums during the period would need to be at least 30 percent to make up for excess charges.

GEICO is also facing a class action lawsuit in Nevada that was filed alongside multiple other class action lawsuits targeting ten major auto insurers. The class action lawsuits were filed against State Farm, USAA, Geico, Acuity, Liberty Mutual, Farmers, Progressive, Travelers, Nationwide, and Allstate.

Day is looking to represent all California residents who purchased a personal automobile, motorcycle, or RV insurance from GEICO between March 1, 2020 to the present. The class action lawsuit is suing for breach of contract, unjust enrichment and frustration of purpose under California’s business and professions code, and false advertising and unfair competition laws.

Day is seeking certification of the Class, declaration of wrongdoing and injunction, damages, restitution, and a jury trial.

Did you think your auto insurance premiums were too pricey during the pandemic-induced shutdowns? Let us know in the comments sections!

Lead plaintiff, Jessica Day, is represented by Melody L. Sequoia of The Sequoia Law Firm and Matthew C. Helland of Nichols Kaster, LLP.

The GEICO Insurance Premiums Class Action Lawsuit is Day, et al. v. GEICO Casualty Company, et al., Case No 5:21-cv-02103, in the U.S. District Court Northern District Of California San Jose Division.

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749 thoughts onClass Action: GEICO Profited off Pandemic With Excessive Premiums

  1. Aimee Clingenpeel says:

    Add me as well please

  2. Jason M Smith says:

    The depth of this companies greed extends far beyond the allegations set forth in this law suit. They have yet to pay me settlements as mandated under California insurance code concerning total loss claims. They also keep altering my policy without my consent and without any requests from me, in particular, the miles of annual usage, despite having submitted mileage certification documents. This allows them to raise my premium. They also keep changing the zip code of where my vehicle is located, which also allows them to raise my rate.than to top it off, they report every claim to data company’s as if they where all for at fault collision claims. This is just what I personally have experienced since purchasing a policy back in 2008. We should do a class action for each of these abuses separately and hopefully let them see what it feels like to get jerked around and robbed, for all intents and purposes.

  3. Brooke Buffington says:

    Add me please!!

  4. Ashley says:

    Please add me

  5. Ms. Yvette says:

    please add me

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