Judge Upholds Geico Uninsured Coverage Class Action Lawsuit

Judge Upholds Geico Uninsured Coverage Class Action Lawsuit

By Courtney Coren

A federal judge has turned down a request by Geico General Insurance Co. to dismiss a putative class action lawsuit accusing the company of failing to inform policyholders that they can raise their uninsured motorist and underinsured motorist coverage, saying the insurance company is not immune under state law. 

Plaintiff Shannon Ensey alleges in the class action lawsuit that Geico violated a New Jersey state law that requires insurance companies to obtain written affirmation from a policyholder if they’ve chosen a policy that provides uninsured/underinsured limits of less than the limits of Bodily Injury Liability coverage limits or $250,000 (whichever is less.)

Geico argued that it was immune from this requirement under a provision of New Jersey law. 

U.S. District Judge Joseph E. Irenas disagreed with their point, citing New Jersey law that clearly states that when insurance policies are established or renewed over the telephone, insurers must then mail policy information to their customers. 

“Plaintiff alleges in the complaint, however, that she never received any materials whatsoever from Geico,” the judge wrote. “Such allegations preclude immunity under both the statute and the administrative code.”

Irenas did deny part of Ensey’s claim against Geico, in which she charged Geico with illegally selling insurance through non-licensed agents. The judge said the New Jersey Department of Banking and Insurance penalizes companies for fraudulent activity and that it didn’t need to be included in the class action lawsuit. 

Judge Irenas also dismissed claims that Geico violated New Jersey’s Consumer Fraud Act, its Truth in Consumer Contract, Warranty and Notice Act, and breached its contract with Ensey. 

Ensey changed her policy with Geico in 2008. She claims that the option of higher uninsured/underinsured insurance limits was never offered to her. She alleges that she was given a policy with a bodily injury limit of $25,000 for individuals, and that she never signed anything consenting to this amount for her policy. 

In August 2008, she was in a car accident with an uninsured driver and the injuries resulted in more than $25,000. According to the class action lawsuit, Geico wouldn’t cover any medical costs beyond that amount because of the limits stated in her policies.

Ensey is seeking to represent all Geico policyholders and beneficiaries since December 2006 who had policies with less than $250,000 for uninsured/underinsured motorists or the policies’ bodily injury limits and did not get written consent.

Ensey is asking that Geico fix its policies so they comply with state law. She is also seeking damages as well as declaratory and injunctive relief. 

The plaintiff is represented by Michael A. Galpern, Andrew P. Bell and James A. Barry of Locks Law Firm LLC, and by Ken Andres and Tommie Ann Gibney of Andrews & Berger PC.

The Geico Insurance Class Action Lawsuit is Ensey v. Government Employers Insurance Company, et al., Case No. 1:12-cv-07669, in the U.S. District Court for the District of New Jersey.

All class action and lawsuit news updates are listed in the Lawsuit News section of Top Class Actions