Accident forgiveness is a key point in much of GEICO’s auto insurance marketing. (Credit: merchantcircle)
A class action suit filed in Texas at the end of February alleges that GEICO has not held up its end of the insurer’s highly advertised accident forgiveness policy.
The complaint was filed in Texas Federal Court by Christopher Cude on February 25. Cude claims that GEICO violated the state’s consumer protection laws with misleading policies, and that the company is unfairly raising premiums for customers who believed they were protected by the forgiveness policy.
Accident forgiveness is a key point in much of GEICO’s auto insurance marketing. On its website, GEICO describes the policy in part: “With Accident Forgiveness on your GEICO auto insurance policy, your insurance rate won't go up due to your first qualifying accident. We waive the surcharge associated with the first at-fault accident caused by an eligible driver on your policy. GEICO Accident Forgiveness is per policy, not per driver. If you have multiple drivers on your policy, any of the eligible drivers may use this benefit once; after an eligible driver uses it, the benefit is no longer available for that policy."
According to the suit, accident forgiveness coverage would be awarded or could be added if a person has been insured with GEICO for five years and has a clean driving record. Consumers can also purchase the coverage when buying or renewing their auto policy.
Cude claims that he was notified by GEICO that he had earned accident forgiveness coverage in May 2024. The suit states that his policy’s declarations page in October 2024 read,” Congratulations! You have earned the free Accident Forgiveness benefit. That means we will waive the surcharge associated with the first at-fault accident caused by an eligible driver on your policy.”
Cude’s wife got into a minor fender bender — their policy’s first at-fault accident. In November 2024, Cude received a policy renewal letter from GEICO stating his premium increased by more than 91%, from $1,392.20 per year to $2,663.70.
The plaintiff states that he reached out to GEICO to inquire about the increase and to remind them he had earned accident forgiveness coverage. In response, the representative he spoke with said that his premium did not increase, but that GEICO had merely applied a surcharge.
According to the suit, Cude seeks to represent a class of Texans insured by GEICO whose premiums increased following their first at-fault accident under the pretense that GEICO misrepresents this policy in their advertising.
“GEICO took advantage of its total loss insureds’ relatively disadvantaged positions by failing to comply with its Accident Forgiveness policy through its employment of an improper scheme designed to ensure GEICO’s insured would still pay higher premiums due to first at-fault accidents,” the suit states. “As a result, Plaintiff and the Class paid artificially increased premiums for first at-fault accidents that fell under the Accident Forgiveness policy and have been damaged accordingly.”
The suit seeks both monetary relief for class members, as well as an order that mandates GEICO adhere to its accident forgiveness policy and refrain from violating Texas insurance law.
The full complaint can be found here.
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