GEICO Systemically Underpaid Consumers Who Lost Their Vehicles in Collisions, Class Action Lawsuit Alleges

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Insurance provider GEICO “systematically and uniformly underpaid” thousands of consumers who suffered the total loss of their vehicle, while vehicles were insured with comprehensive coverage, a new class action lawsuit alleges.

The Geico class action lawsuit was filed in Kentucky on May 7 by lead Plaintiff Toni Akers, who alleges that GEICO has breached contracts and violated Kentucky law by not reimbursing adequate fees.

According to the class action lawsuit, Akers insured his 2013 Toyota Corolla LE Sedan with GEICO, paying a premium in exchange for GEICO’s promise to “repair any damage to an insured vehicle caused by a covered peril.”

In 2018, Akers was involved in a car accident, and submitted a claim to GEICO for the physical damage caused by the collision, the claim states.

“Because the cost to repair exceeded the cost to replace the vehicle, GEICO determined that Plaintiff’s Vehicle was a “total loss” and elected pursuant to the Policy to pay the [actual cash value] ACV of the vehicle instead of the higher cost to repair the vehicle,” the class action lawsuit says, adding the value was determined to be $10,135.72.

GEICO subtracted the deductible of $500 and $18 for “State and Local Regulatory Fees” because such fees are “replacement costs” owed as part of ACV, and because Kentucky law requires payment of all necessary fees, the claim states.

However, GEICO significantly underpaid the amount of State and Local Regulatory Fees owed under the Policy and under Nebraska law, Akers alleges. Akers say that the law requires at minimum a $17 title fee, and $6 clerk fee, a $21 plate fee, and a $22 lien fee, totaling at least $66.00 in fees.

“Despite these reasonably necessary replacement fees, GEICO paid Plaintiff and other class members only $18.00 in state and regulatory fees. GEICO’s refusal to pay the full cost of replacing a vehicle in Kentucky after a total loss is a violation of both the terms of the Policy and Kentucky law,” the claim states.

Akers wants to represent all Kentucky residents who suffered lost payment after their GEICO-insured vehicle suffered a total loss. He is suing for breach of contract and violation of state laws. He seeks certification of the Class, damages, legal fees, interest, and a jury trial.

Akers’ claim is not the only legal action GEICO is facing. In March, the company was hit with a class action lawsuit that alleges it did not “Giveback” to customers as promised and unfairly profited off the COVID-19 pandemic. Consumers allege 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.

Do you have car insurance through GEICO? Tell us about your experience in the comments section or sign up to join a class action lawsuit against Geico by going here.

Akers is represented by Ronald Johnson of Hendy Johnson Vaughn Emery and Amy L. Judkins, Edmund A. Normand, and Jacob L. Phillips of Normand PLLC

The GEICO Car Insurance Class Action Lawsuit is Akers v. Government Employees Insurance Company, Case No 2:21-cv-00060-DLB-EBA, in the U.S. District Court Eastern District of Kentucky Northern Division at Covington

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