GEICO Accused Of Discriminating Against Unmarried & Low-Income Drivers

California law requirers auto insurers in the state to offer minimum-coverage policies to drivers with clean driving records, regardless of factors like gender, employment, marital status, or education. But one consumer advocacy group claims that GEICO isn’t abiding by those rules and is allegedly misleading certain customers into thinking they’re getting the minimum coverage when they are in fact being offered several times more than the minimum.

The California Insurance Code states that insurance providers must offer “persons who qualify for a good driver discount… automobile liability coverage in the minimum financial responsibility coverage amounts” of $15,000 for a single injury in an accident, $30,000 for injury to more than one person, and $5,000 for property damage — dubbed a 15/30/5 policy.

But according to a petition [PDF] filed by the Consumer Federation of California with the state’s Dept. of Insurance, GEICO’s take on this minimum is not only higher than what the state prescribes, but varies depending on factors the insurer is not supposed to take into account.

The petition claims that its testing of the GEICO site found that insurance applicants with the same record get wildly different offers for “Lowest Limits” coverage.

For example:

• APPLICANT A: A single woman with a perfect driving record, who works as a vice president in a private company and has no prior insurance.

THE “LOWEST LIMITS” OFFER FROM GEICO: This customer is quoted a 15/30/25 policy (the last portion being five times the statutory minimum amount for property damage) at $162.18 for a six month period.

• APPLICANT B: The same woman with the same driving record, only this time her job is listed as a cashier.

THE “LOWEST LIMITS” OFFER FROM GEICO: The petition states that the driver is now offered a 100/300/50 policy, which nearly seven times the minimum coverage for single injury claims, and ten times the minimum for both multiple-injury and property claims. Additionally, even though this applicant has the identical driving record of the first, she is asked to pay $289.68 for six months, a 54% difference in price.

The petition alleges that these same sorts of changes occur when you change other factors that aren’t supposed to be included under California law, like educational attainment, marital status, or whether or not the driver currently has insurance.

There is an asterisk next to the words “Lowest Limits” on the GEICO site. It points users to a disclaimer that reads: “The ‘Lowest Limits’ package quote includes the lowest bodily injury limits that we offer in your state, but may not represent the lowest limits available for other coverages, nor the lowest possible deductibles.”

The CFC describes this disclaimer as “incorrect and deceptive.”

“GEICO deceives vulnerable consumers by telling them that coverage levels ten times higher than the state requires are the lowest options available,” explains the group in a statement. “CFC believes that GEICO should pay stiff penalties and be prohibited from selling its product in the state.”

In terms of penalties, GEICO could face fines of $5,000 to $10,000 per incident if it’s found to have violated the law. Given that GEICO already has around 1 million policyholders in California alone, the total penalty could be mammoth.

In addition to calling GEICO out on these alleged violations, CFC is asking the Dept. of Insurance to pull the company’s license to operate in California.

We’ve asked GEICO for comment on this petition but have not yet heard back from the insurer. If we hear anything back, we’ll let you know.