Geico policyholders get class certification in COVID rebate lawsuit

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Update: 

• A California judge certified a class of at least 2 million Geico policyholders in a class action lawsuit alleging the insurance giant did not “give back” to customers as promised and unfairly profited off the COVID-19 pandemic.
• In an order filed Oct. 31, U.S. District Judge Beth Labson Freeman says Plaintiff Jessica Day pointed to common questions of law and proposed a model capable of calculating damages on a classwide basis.
• The class includes any California resident who has a Geico personal auto, motorcycle or RV policy covering any period since March 2020. 
• Day’s lawsuit alleges Geico charged exorbitant premiums during the pandemic based on old and irrelevant data, misled customers about passing on savings and ultimately made money off the pandemic. 

Geico giveback pandemic class action lawsuit overview:

• Who: Geico is being sued by one of its car insurance customers. 
• Why: The customer claims the company did not “Giveback” to customers as promised and unfairly profited off the COVID-19 pandemic. A judge has trimmed the class action lawsuit.
• Where: The case was heard in California federal court.

(Jan. 25, 2022)

Insurance giant Geico has had a partial win in court after it was alleged in 2021 that the company did not “Giveback” to customers as promised and unfairly profited off the COVID-19 pandemic.

In an order filed Jan. 20, a California federal judge trimmed a class action lawsuit that alleges the company charged exorbitant premiums during the pandemic based on old and irrelevant data, misled customers about passing on savings and ultimately made money off the pandemic. 

In her ruling, U.S. District Judge Beth Labson Freeman ruled that Plaintiff Jessica Day’s breach of contract claim used selective language from her contract.

Judge Freeman also trimmed Day’s claim for unjust enrichment and false advertising. She said Day hadn’t proved she relied on Geico’s statements that it would pass the company’s savings on to customers as promised in its Giveback program.

“[Day] only alleges that she received advertisements, emails and other information from Geico representatives concerning the ‘Giveback,’” the judge wrote. “These allegations are too general. [Day] has not alleged that she viewed the ‘passing these savings on’ statement prior to renewing her policy.”

She gave Day 21 days to file an amended complaint.

Plaintiff says she renewed Geico auto insurance after receiving ads about Geico Giveback program

In her original complaint, Day alleged that after receiving advertisements about the Geico Giveback credit program, designed to pass savings from pandemic-induced shutdowns onto customers, 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.

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.

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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