A class action lawsuit filed in Texas claims GEICO will not comply with the accident forgiveness program when a driver with a record-less record falls into the first breakdown.
An executive of Texas resident Christopher sued GEICO on February 25, claiming that the insurance company raised its auto premium 91% by 91% after the insurer was involved in a minor fender vendor accident she negligently committed in October 2024. Cude was eligible for Geico’s accident forgiveness benefits with his car insurance renewal in May 2024. Geico said it would waive any additional fees related to the initial damage accident caused by a qualified driver in relation to the couple’s policy.
When Cude received the policy update in November, he learned that his premium would increase from $1,358 to $2,664. Cude contacted Geico for an explanation of the increase in premiums, reminding Geico that he had forgiven the accident. A representative from GEICO told him that his premiums did not increase, but instead, the carrier simply applied additional fees, the lawsuit argues.
The class action lawsuit accused Geico of not increasing insurance premiums by forgiveness of an accident caused by the first breakdown. The lawsuit alleges that GEICO violated Texas’s Deceptive Trade Practices Act and Texas Insurance Act.
“In a scheme that illegally induces consumers to purchase car insurance, Geico unfairly and artificially increases customer premiums with compensation for accidental forgiveness by characterizing it as a “additional charge” or other artificial terminology,” the lawsuit states.
Geico did not respond to requests for comment.
According to the GEICO website, the initial qualifying accident will not increase customer premiums. If your policy has multiple drivers, one of the eligible drivers can use this benefit once. The benefits are no longer available under that policy after a qualified driver uses it, the website says.
Drivers must meet certain criteria to qualify for forgiveness of accidents, including:
This policy is insured by GEICO for more than 5 years. At least one driver on policy has five years of driving experience.
Geico has seen a reversal of fate in underwriting in recent years.
Last month, Career said it had acquired 2024 underwriting profits before taxes that more than doubled the $3.6 billion they acquired in 2023.
The GEICO’s total ratio of 81.5 in 2024 was an improvement of 9.2 points in 2023, which was over 20 points better than 20 points.
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Litigation Texas
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