Geico Insurance In Hot Water
That cute little lizard seems to have gotten himself in some hot water. Recently the California Department of Insurance announced that Geico insurance is on the hook for $6 million in a settlement over discriminatory auto-insurance pricing.
The insurance company was apparently distorting the minimum auto policy of $15,000 per person and $30,000 per automobile accident to customers the company considered less desirable. Instead of the actual minimum policy rates, Geico quoted certain customers with figures as high as $100,000 per per person and a jaw-dropping $300,000 per potential auto accident. According to the California Department of Insurance—this was the lowest quote for undesirable potential customers. Unsurprisingly, these steep quotes—which instantly created sticker shock–encouraged customers to look elsewhere for insurance policies.
According to research conducted by the Consumer Federation of California who tested Geico’s website, the insurer systematically quoted significantly higher rates for any potential customer who was unmarried, had a low-paying job, unemployed, or did not hold a Bachelor’s degree from a reputable higher education institution. Gaps in insurance coverage also resulted in sky-high rates.
Geico denied the claims, but will change is business practices as per the settlement. If the company fails to do so in three years they could be fines another $6 million.