GEICO has agreed to pay $6 million as part of a settlement with the California Department of Insurance (“DOI”). In February 2015, the Consumer Federation of California (“CFC”) filed a petition with the DOI against GEICO, alleging its online premium quoting system was discriminatory and misleading to consumers and violated civil rights and insurance law.
After extensive testing of GEICO’s website, the CFC determined that when a good driver, that was deemed a less desirable customer by GEICO, completed an online questionnaire, GEICO misrepresented a $100,000/$300,000 limit quote as being a lowest limits quote, when in fact, it was not. Though insurers may also offer and sell policies with higher limits, California law requires insurers to offer a minimum limits policy of $15,000/$30,000. GEICO's online premium quoting system was inaccurately describing quotes for higher limits as the lowest limits.
In addition to paying a monetary payment to the state of California, GEICO is required to change its website to provide all good drivers an initial quote for identical coverage, without regard to marital status, gender, educational attainment, occupation, or current insurance status. GEICO must also offer a quote for a $15,000/$30,000 policy to certain consumers for the next three years and has agreed to twice-yearly audits of their website for the next three years to ensure they are complying with the law. Although the settlement does not require GEICO to issue refunds to customers who may have been overcharged, restitution for overcharged motorists may be available under other laws.
Auto insurance costs and coverage vary, so it is wise to comparison shop. After deciding what kind of coverage you need, start your search by checking our directory for auto insurance brokers and use the 'Get Quote' option to contact one of our BCA members directly. Some additional tips that may help include:
- Get the quote in writing.
- Ask for the complete name of the insurance company that will issue each policy.
- Make sure the company is licensed to do business in your state.
- Some insurance commissioners, like California’s DOI, provide information on a company’s record for paying claims and customer service. If your state has this service available, be sure to check the company’s record.
Visit the DOI’s website for complete information on GEICO’s $6 million settlement. Consumer’s who believe they overpaid for insurance due to receiving an inflated online quote can file a complaint.
About Business Consumer Alliance
Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.