GEICO Class Action Lawsuit Targets Accident Reporting Practices

Vehicle insurance policies are dependent on a number of factors that actuaries massage into premium rates. According to a new car insurance class action lawsuit, GEICO failed to accurately report responsibility of policy holders in collisions, one of the key influences on price.

Efrain Hernandez and Thomas Calkins both allege that they purchased policies from the firm, officially known as the Government Employees Insurance Company. In both cases, they were assigned to categories of customers with increased risk profiles. However, in the case of Mr. Hernandez, it was the purported result of the company notifying the New York Division of Motor Vehicles that he was at fault for two car accidents, an inaccuracy the company later rectified.

For Calkins, he was deemed an “assigned risk” without cause, according to the pair’s class action lawyers, and as such was subject to increased premiums and unable to shop for reasonable car insurance policies from other companies. GEICO staff later informed its competitor Allstate that he had a standard policy, enabling him to get a quote that he later accepted with the other company.

The two allege that GEICO car insurance has a history of practices that harm car insurance companies including improperly reporting the responsibilities of drivers such as involvement in at-fault accidents and assigning them to risk categories and indemnity policies that their driving records do not merit. It kept both of them from switching their policies to Allstate until they allegedly pleaded with GEICO officials.

They seek to represent a class of all GEICO car insurance policy holders who were incorrectly assigned responsibility in accidents, those with “standard insurance policies” who the company represented as having indemnity plans over the last six years. Two subclasses would cover those residing in New York but members of the first class, and those incorrectly described as having indemnity policies in the past three years.

According to another news report, the company is also subject to a putative GEICO class action lawsuit by Delaware residents who reportedly were denied personal injury protection payments or saw much lower payments due to allegedly arbitrary decisions made by the company.

The two lead plaintiffs are represented by class action lawyers Oren Giskan and Raymond Audain of Giskan Solotaroff Anderson & Stewart LLP and Joseph A. Romgnolo of the Law Offices of Joseph A. Romagnolo.

The GEICO Car Insurance Class Action Lawsuit is Efrain Hernandez, et al. v. Government Employees Insurance Company, et al., Case No. 14-cv-01580, in the U.S. District Court for the Eastern District of New York.