A class action lawsuit filed in Texas alleges GEICO doesn’t abide by its Ac
cident Forgiveness program when a driver with an unblemished record gets
into a first, at-fault accident.
Texas resident Christo
pher Cude sued GEIC
O on Feb. 25, alleging the insurance carrier raised his auto premium 91% after his wife got into a minor fender bender accident in Oct
ober 2024 at which she
was at fault. Cude had qualified for GEICO’s accident forgiveness benefit upon
his May 2024 auto insurance renewal. GEICO said it would waive the surcharg
e associated with the first at-fault accident caused by an eligible driver on the couple’s policy.
When Cude received a
his premium increased from $1,358 to $2,664. Cude reached out to GEICO f
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or an explanation of the premium increase and to remind GEICO that h
e had Accident Forgiveness. A GEICO representative told h
im that his premium did not increase, but instead, the carrier merely applied a surcharge, the lawsuit alleges.
The class action accuses GEICO of misrepresenting it would not increase the
premiums for its insured with accident forgiveness due to first at-fault accidents.
GEICO’s website says a customer’s insurance rate won’t go up due to a first qualifying accident. If there are multiple drivers o
n a policy, any of the eligible drivers may use this benefit once; after an eligible driver u
ses it, the benefit is no longer available for that policy, the website states.
GEICO has seen a reversal of fortunes in underwriting in recent years.
The carrier last month said it earned 2024 underwriting profit before taxes of $7.8 billion, more than double the $3.6 billion it earned in 2023. GEICO experienced a nearly $2 billion underwriting loss for 2022.
GEICO’s combined ratio of 81.5 for 2024 was a 9.
