Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.
Update:
- An Illinois federal judge allowed Geico to appeal a recent ruling denying its attempt to dismiss a class action lawsuit that alleges it unjustly profited off the COVID-19 pandemic by charging excessive premiums when people drove less.
- On March 3, U.S. District Judge Sharon Johnson Coleman approved Geico’s motion to certify a question for interlocutory appeal regarding the “filed rate doctrine.”
- Geico argues it cannot not be sued because of the “filed rate doctrine,” which intended to block companies from being sued by individuals over rates that have been filed and approved with a regulatory body, in this case, the Illinois Department of Insurance.
- However, the Illinois Department of Insurance has nothing to do with approving or rejecting private automobile insurance rates, Judge Johnson Coleman ruled when initially denying the motion to dismiss the case.
- Despite this, the judge allowed the appeal, stating, “The legal question here has not been answered by the Illinois Supreme Court, and holdings from an Illinois intermediate appellate court and the Seventh Circuit appear to be at odds with one another.”
(July 23, 2020)
A new class action lawsuit accuses Geico of unjustly profiting off the COVID-19 pandemic by charging excessive premiums when people are driving less.
Many states, including Illinois, began enforcing social distancing measures and business closures in March, meaning individuals were staying home for extended periods, the Geico premiums class action lawsuit states.
Plaintiff Briana Siegal of Illinois maintains that while other businesses have been suffering due to the lockdowns prompted by the pandemic, insurance companies have “scored a windfall” by continuing to charge high premiums even though people are driving less and, therefore, getting into fewer collisions.
Because of this, insurance company premiums, including Geico premiums, being charged during the pandemic are “unconscionably excessive,” the complaint says. The class action lawsuit cites a report that determined at least a 30% average refund of paid premiums would be needed to compensate for excess amounts customers paid between mid-March and the end of April.
Geico premiums were charged throughout this time, and the company has failed to issue the appropriate refunds, the complaint alleges.
In addition, Siegal’s complaint says the Geico Giveback program, which applies a 15% discount on new and renewal policies, is “woefully inadequate” to make up for the excessive Geico premiums because it does not apply to premiums the customer has already paid or will pay on policies that existed at the start of the pandemic.
According to the class action lawsuit, Illinois Gov. J.B. Pritzker issued a stay-at-home order March 21. The order was originally supposed to be in place until April 7, but was extended twice — once until April 30 and again until May 29 — due to the severity of the pandemic.
Pritzker’s order prohibited “[a]ll travel, including, but not limited to, travel by automobile, motorcycle, scooter, bicycle, train, plane, or public transit, except Essential Travel and Essential Activities as defined herein.”
The governor announced the state’s phased-in reopening plan May 5, the complaint says. However, the state has a long way to go toward fully opening, and even now, businesses are being told to allow employees to work from home when possible.
The class action lawsuit maintains cellphone location tracking data shows people are driving less because of COVID-19.
From mid-March through the end of April, the complaint says, the number of miles people drive dropped an average of nearly 63% per week because of the pandemic.
In addition, the number of automobile collisions has also decreased, according to the complaint. The Illinois State Police reported crash rates between April 1 and 26 dropped by more than half compared to 2019.
For these reasons, auto insurance companies’ premiums during COVID-19, including Geico premiums, are excessive, the complaint states.
Geico auto insurance rates are meant to cover expected future claims and expenses, the class action lawsuit says. The expected future expenses are extrapolated from historical data.
Siegal’s complaint quotes a joint report by the Center for Economic Justice and the Consumer Federation of America: “Because of COVID-19 restrictions, the assumptions about future claims underlying insurers’ rates in effect on March 1 became radically incorrect overnight. When roads emptied, the frequency of motor vehicle accidents and insurance claims dropped dramatically and immediately. The assumptions in insurers’ rates covering time-frames from mid-March forward about future frequency of claims became significantly wrong when the roads emptied because of Stay-At-Home orders and business closures starting in mid-March. The then-current rates became excessive not just for new policyholders going forward, but also for existing policyholders whose premium was based on now overstated expectation about insurance claims.”
Geico generated a pretax underwriting gain of $984 million during the first quarter of 2020, an increase of nearly 28% over the same quarter in 2019, the lawsuit states.
The class action lawsuit alleges Geico violated the Covenant of Fair Dealing and Good Faith, became unjustly enriched and breached the Illinois Consumer Fraud and Deceptive Business Practices Act.
The plaintiff seeks disgorgement of Geico’s “ill-gotten gains,” all available damages and punitive damages, declaratory and injunctive relief, and any other relief deemed appropriate by the court.
The issue of car insurance and financing during the pandemic is not just a problem in the U.S. Recently, the Financial Conduct Authority in the U.K. announced that it would be helping its residents with payment freezes.
Do you carry Geico auto insurance? Do you think your premiums are unfair? Tell us about it in the comments.
The plaintiff is represented by Ryan F. Stephan, James B. Zouras and Teresa M. Becvar of Stephan Zouras LLP, and Matthew H. Morgan, Robert L. Schug and Charles A. Delbridge of Nichols Kaster PLLP.
The Geico Auto Insurance Premiums Class Action Lawsuit is Briana Siegal, et al. v. Geico Casualty Co., et al., Case No. 1:20-cv-04306, in the U.S. District Court for the Northern District of Illinois.
Don’t Miss Out!
Check out our list of Class Action Lawsuits and Class Action Settlements you may qualify to join!
Read About More Class Action Lawsuits & Class Action Settlements:
83 thoughts onGeico pandemic profit class action escapes dismissal, insurer can appeal
I have had Geico for over six years. No accidents and no violations; however, my premiums continue to go up every six months. Please add me.
PREMIUMS ARE CRAZY
I’ve been a long-time customer of Geico, and yes, their premium have been going up, especially during the Pandemic. Please sign me up.
I’m in on that as well , add me to the list of plaintiffs .
Because of my profession I barely drove for almost a year! Geico still charged high premiums however and just increased my premiums! It’s insane!
I have an increase and I am retired. Because I have been sick I didn’t get the annual milage request sent in time. When I called I explained exactly how many miles I drove last year and was told for my city they averaged everyone at 5000 miles. She said they would make an adjustment and didn’t BUT that isn’t their only lie. The on hold announcements in the past said you get a discount for multiple policies. They didn’t. When I asked they said it didn’t apply to my state.
I called Geico and told them we have not been driving now about 6 months or so, they didn’t care they still charged!
I had GEICO before the pandemic and after the pandemic and I was a severe victim of CONSUMER BEING LEFT BEHIND. I filed a claim with geico in March 2019 because a drunk lady hit my 2017 challenger leaving a bar while I went to pick my boyfriend up While I was waiting and eating in my car she backed into my car causing damage to my car and causing me to jab my throat with my fork. We exchanged information I took photos and etc. She begged me not to do anything cause she was on parole. So I texted and texted her she ended up denying all fault to her boyfriend’s AAA INSURANCE. She wasn’t even insured on his vehicle. His company told me there’s nothing they can do because he only had LIABILITY INSURANCE. Wtf. I submitted my proof to the department of insurance, the police department, DMV, CFPB, FTC and my insurance company and no one did anything. My insurance wanted me to pay for the damages she caused. This has left me so depressed and distraught I lost total hope in all things. Even in life itself because these agencies have become so lazy and refuse to do the job they have been paid to do. I don’t understand how all these companies turned a blind eye at the fact she was an uninsured driver driving drunk. What if she had of hit a child or someone else and something more traumatic had of occurred. The supervisor at AAA told me they’re denying my claim because I had no proof which was a total lie and they covered up for their client defrauding government claims and no telling how much they have gotten away with. Now I have been left in total disparity and Statue of limitations has ran out. There should be something able to be done for the simple reason I already started with the several complaints. To add to the fire I was being charged an excessive monthly rate of 389.00 a month for two cars insured with geico and was only driving one of them. What the heck is wrong with these companies and their regulation committees. So tired of them all saying we cant enforce them to make payment or choose in your favor. Well what the heck are you even here for just to resend the same complaint to them that we have already sent ourselves. Just to be rejected all over again. I never received a refund for pandemic over charged premiums from Geico and that BS 15% deal what was that never got that either . No trust or faith anymore in the insurance companies. They jave totally failed me and my family.
I called Geico and asked about the charge for not driving and they did nothing. I’m in NY and they said they had to keep it because of NY law add me
Please add me