Feb. 13, 2015—In a petition filed with the California Department of Insurance, the Consumer Federation of California (CFC) 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.
In a press release, CFC states that it “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, the complaint alleges, who have the following characteristics: unmarried, not employed in a professional or executive occupation, not completed college, and not currently insured.
Consumers in these demographics, who obtain an online GEICO quote, are told the "Lowest Limits" coverages the company offers are at levels that are 500 percent to 1,000 percent higher than the minimums required under law for good drivers, the complaint states.
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."
"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,” Richard Holober, executive director of the CFC, said in a release. “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."
