SACRAMENTO (PRNewswire-USNewswire)- In a petition filed with the California Department of Insurance, Consumer Federation of California alleges GEICO illegally deceives and discriminates against unmarried, lower or moderate-income motorists by quoting them much higher minimum coverage levels than permitted under state law.
CFC is calling on the Department of Insurance to enforce insurance and civil rights laws by ordering GEICO to halt these practices and impose penalties, which may include fines and revocation of the company’s license to sell auto insurance.
GEICO’s deceptive rate quotes target good drivers who have all of these characteristics: are unmarried, not employed in a professional or executive occupation, have not completed college, and are not currently insured. Targeted consumers who obtain an online GEICO quote are told the “Lowest Limits” coverages the company offers are at levels that are 500% to 1000% higher than the minimums required under law for good drivers.
California requires insurers to offer good drivers a policy with minimum coverages of $15,000 for a single injury, $30,000 for injury to more than one person in an accident, and $5,000 for property damage, called a “15/30/5 policy.”
When a good driver in California fills out information on GEICO’s website, and tells the company that he or she is unmarried, and does not have a college degree, and is currently uninsured, and is unemployed or not working in a professional or executive job, the website presents a rate quote for six months’ coverage that it labels as the “Lowest Limits” it offers $100,000 for a single injury, $300,000 for injury to more than one person, and $50,000 for property damage, called a “100/300/50 policy” in CFC’s petition.
If that person is a professional or executive, or married, or a college graduate, or has current insurance coverage, GEICO’s website produces a “Lowest Limits” quote for one month’s coverage including $15,000 for one injury, $30,000 for all injuries per accident, and $25,000 for property damage, called a “15/30/25 policy” in CFC’s petition. CFC alleges that the representation of $25,000 as “Lowest Limits” for these good driver quotes is another violation of law.
The resulting premium quotes for targeted motorists range from 40% to 54% higher, and are $75 to $132 more costly for six months’ coverage for a 14-year-old compact car than the quote an otherwise identical driver would receive if that driver were married, or a college graduate, or in a higher-income occupation, or currently insured.
“Our extensive analysis of GEICO’s online rate quote system found that it is programmed to target unmarried low or moderate-income drivers for inflated rates. Targeted motorists either pay for excessive coverages they are falsely told are the lowest available, or GEICO drives them away with these costly quotes. Either way, GEICO is breaking California’s insurance regulations and civil rights law,” stated Richard Holober, Executive Director of the Consumer Federation of California.