A Florida policyholder has filed a proposed class action lawsuit against GEICO, alleging the insurer added strangers to her auto insurance policy, resulting in higher premiums.
According to the complaint, GEICO uses third-party data sources to identify licensed or permitted drivers who may be associated with an insured’s address. The lawsuit claims the company relies on this information to add individuals to policies if policyholders do not respond within a specified timeframe.
On Feb. 21, 2024, GEICO emailed policyholder Allison Kane and her late husband, who was listed on the policy at the time. The email stated that “Carter K Riddle may be a licensed or permitted driver with your address listed as their primary address.”
The suit states that GEICO did not further verify the individual’s connection to the household. Instead, the complaint alleges that the company added Riddle to the policy after no one contacted GEICO within 15 days of the Feb. 21 notice. The lawsuit describes Riddle as a stranger to the insured.
The complaint further alleges that GEICO added another individual to the policy in December.
According to the filing, GEICO “routinely refused to remove individuals based on the insured’s truthful statement that the person had no connection to the household or vehicles and or was insured elsewhere.” The suit states that GEICO required documentation or third-party verification to remove the individuals. It also alleges that these requirements were not disclosed in the notice and were not required by the policy. The complaint asserts that such documentation was often difficult or impossible for insureds to obtain.
The lawsuit brings claims on behalf of proposed statewide and nationwide classes. It alleges breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment. It also alleges violations of Florida’s Deceptive and Unfair Trade Practices Act.
The complaint states that general insurance law, including Florida law, requires insurers to base premiums on accurate and verified information and prohibits charging for risks that do not exist. It further alleges that by adding unrequested drivers as rated drivers, GEICO charged premiums for what the plaintiff describes as nonexistent risks and for individuals who did not present underwriting exposure under the policy.
Separately, GEICO faces a class-action lawsuit in Ohio over total-loss claims. In that case, plaintiffs allege that GEICO underpays actual cash value on total loss settlements.
According to the Ohio complaint, GEICO, through its valuation vendor CCC Intelligent Solutions Inc., reduced payment amounts by applying a “condition adjustment” to the prices of comparable vehicles used to determine actual cash value. The suit alleges that neither GEICO nor CCC inspected the comparable vehicles and therefore lacked a factual basis for applying the adjustment. Plaintiffs contend that this practice resulted in payments below the actual cash value required by policy terms and Ohio law.
Earlier this month, GEICO filed a motion to dismiss the Ohio lawsuit for failure to state a claim.
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