GEICO Hit with Class Action Over Allegedly ‘Unfair and Deceptive’ Claims Processing

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A proposed class action has been filed over Geico General Insurance Company’s allegedly deceptive and unfair conduct with regard to the processing and payment of policyholders’ vehicle loss claims.

According to the case, GEICO misleads policyholders with regard to their rights under their policies, which the plaintiff says are not “honestly disclosed”; bases its estimate of a car’s value on non-comparable vehicles worth much less; misleads policyholders into expecting “family treatment” when both parties of the accident were insured by GEICO; and withholds payment for rental cars and vehicle storage.

The plaintiff, a GEICO policyholder, says he was in a car accident in January 2019 with another car owned and operated by GEICO policyholders, who were determined to be at fault for the collision. Per the case, the plaintiff followed GEICO’s instructions as to where to take the car to be inspected and, in the meantime, arranged to rent a car as a second driver on a friend’s credit card. The lawsuit alleges GEICO initially failed to inform the plaintiff that he was entitled to the use of a rental car and, when confronted, stated the man’s policy only allowed the rental to be covered for one week. 

According to the lawsuit, GEICO forced the plaintiff to seek weekly extensions on his rental car while the insurer “took its time” deciding whether the vehicle would be declared a total loss. GEICO’s failure to timely process the plaintiff’s claim and advise him on the amount of time he was entitled to a rental car caused the man to return the car one day late after four purported extensions, which in turn, barred him from being able to rent from that particular company ever again, the suit claims. To date, GEICO has still not reimbursed the plaintiff for the rental car despite being presented with the final bill, the case says.

Per the lawsuit, GEICO eventually declared the plaintiff’s car to be a total loss and sent him a statement eight to 10 days later offering to pay an amount “substantially below” the car’s market value and “nothing” for the rental car and storage of the plaintiff’s vehicle. The plaintiff says he objected to the amount offered by GEICO and presented similar vehicles for sale in the local market that were worth “more than twice the value” offered by the insurer. In response, GEICO allegedly submitted vehicles from other states “without any details as to the condition or mileage” and deducted value from the plaintiff’s vehicle “for every scratch or blemish.”

Although GEICO indicated over the phone that it would handle the cost of the rental and vehicle storage separately, the suit says, the insurer “refused” to submit the commitment to the plaintiff in writing and has failed to adjust the vehicle’s value, reimburse the plaintiff for the rental and take responsibility for the vehicle’s storage, according to the complaint.

The plaintiff says that after the defendant processed the claim under his policy and applied the deductible as a reduction to its offered price, he objected and stated that GEICO should demand the deductible from the other party involved in the accident given they were determined to be at fault. The plaintiff then inquired as to whether the claim would affect his future premiums, after which GEICO “switched and processed the claim” under the other party’s policy, the suit says. The plaintiff believes GEICO closed his file “as a way to exert pressure” for his refusal to accept the company’s “unfair and inadequate offer.”

Initially filed in Miami-Dade County, Florida Circuit Court, the case has since been removed to the state’s Southern District Court.

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