GEICO, Progressive Challenged in Setting Insurance Rates

Feb. 9, 2017—Consumer Watchdog has petitioned the California Department of Insurance to reject GEICO's and Progressive's use of occupation in setting auto insurance rates.

Consumer Watchdog claims the insurance companies give discounts to drivers who are employed in "elite" professions—such as lobbyists, lawyers and bankers—while surcharging drivers who do not meet the companies' selective criteria, including those in less-skilled or non-professional occupations. The group says such discriminatory pricing results in lower-income drivers paying more and is unlawful under California's landmark insurance reform law, Proposition 103.

In the petition filed against GEICO, Consumer Watchdog challenged the company's application for an overall rate hike of 4.9 percent, or $11 million. Consumer Watchdog is challenging that GEICO is proposing a rate decrease or modest overall rate increases of between negative 0.4 percent and 2.2 percent for the "elite occupations," while also raising rates for drivers not employed in one of those occupations by 11.5 percent.

In addition to challenging these actions as unlawful, Consumer Watchdog's analysis concludes that GEICO has failed to support its proposed rates and that all of the company's 150,000 policyholders are actually due for an overall rate decrease.