The lawsuit claimed the insurer overcharged policyholders during the early stages of the COVID-19 pandemic.
A federal judge has determined GEICO, the car insurer owned by Warren Buffett's Berkshire Hathaway, will not be subjected to class-action claims in a lawsuit alleging it overcharged policyholders during the early stages of the COVID-19 pandemic, Reuters reported.
U.S. District Judge Sharon Johnson Coleman in Chicago said Illinois policyholders could not sue as a group, as the intricacies involved in calculating damages for individual drivers would overshadow the commonalities within the proposed class. Additionally, Coleman said there was no "common injury" stemming from GEICO's announcements about its "GEICO Giveback" program, which was introduced as a response to decreased driving due to shelter-in-place orders.
The lawsuit was initiated by Illinois residents who purchased car, motorcycle or RV insurance from GEICO since March 21, 2020. The plaintiffs pointed to a reduction in driving and subsequent accidents during the pandemic, arguing that GEICO's premiums were excessively high compared to competitors like State Farm and Allstate, who provided refunds to their policyholders.
Despite offering $2.5 billion in credits to its policyholders in April 2020, GEICO's approach was deemed insufficient by the plaintiffs, who accused the insurer of violating Illinois consumer protection laws by maintaining high premium rates.
GEICO's financial performance during the pandemic included a significant drop in its loss ratio -- a measure of premiums paid against claims -- which reached a 13-year low in 2020. However, the insurer faced underwriting losses in the following periods, prompting strategic adjustments to bounce back, evidenced by a substantial pre-tax underwriting profit in 2023.
FAQs
A federal judge has determined GEICO, the car insurer owned by Warren Buffett's Berkshire Hathaway, will not be subjected to class-action claims in a lawsuit alleging it overcharged policyholders during the early stages of the COVID-19 pandemic, Reuters reported.
Is GEICO overcharging? ›
March 12 (Reuters) - Geico, the car insurer owned by Warren Buffett's Berkshire Hathaway (BRKa. N) , opens new tab, will not face class-action claims as it defends against a lawsuit alleging it overcharged policyholders early in the COVID-19 pandemic, a federal judge ruled on Tuesday.
How much will I get from a GEICO class action lawsuit? ›
Members in the class action lawsuit against Geico can receive payment for unpaid regulatory fees and unpaid sales taxes. As listed on the settlement website, individual payments may be $2,051.98 on average, with some members receiving higher or lower payments.
Has anyone ever sued GEICO? ›
The most commonly filed lawsuits against Geico in relation to auto accidents include: Personal injury lawsuit: The purpose of a personal injury lawsuit is to seek compensation for losses and damages in a car accident, such as pain and suffering and medical expenses.
Is GEICO in trouble financially? ›
Geico is going through a rocky patch, suffering a $1.9 billion pretax underwriting loss in 2022. Competitor Progressive is also snapping up market share, according to an analysis from UBS.
Is GEICO hard to deal with? ›
Geico can be difficult to deal with at times, based on our research.
Is it worth joining a class action lawsuit? ›
And since class action cases may take years, even to obtain a court-approved settlement, “sometimes it's easier to settle an individual case than the entire case,” Feldman says. However, if an eligible member does not plan on filing an independent lawsuit, there's no obvious downside to being a member, he says.
Should I cash a class action settlement check? ›
People have mixed feelings about class-action suits, and whether you cash class-action refund checks is up to you. Generally, if you get one, you probably paid a lot more in wrongful fees than you're getting back in the settlement. If you don't cash the check, the money may go back to the company.
Can you get more money from a class action lawsuit? ›
Class action lawsuit settlements are not divided evenly. Some plaintiffs will be awarded a larger percent while others receive smaller settlements. There are legitimate reasons for class members receiving smaller payouts.
Why is GEICO charging me so much? ›
Geico may have raised your rates because of changes to your policy or circ*mstances. Examples include adding a new type of coverage, becoming eligible for an additional type of discount, being involved in an accident, or buying a new car.
Auto insurance rates are going up
Across the country, Geico increased its average auto insurance premiums by 25.9% from 2022-2023.
What is the GEICO controversy? ›
GEICO, one of the largest auto insurance companies in the United States, has settled allegations by the National Labor Relations Board (NLRB) that it engaged in illegal anti-union activities, including threatening and interrogating employees in upstate New York about their unionization efforts.
Why is car insurance so expensive all of a sudden? ›
Your particular driver profile, which includes factors like where you live, your age and your driving record, influences what you pay for car insurance. But rising car repair costs and an increase in disaster-related claims are significant reasons why car insurance rates are surging for many drivers.
