Consumer Watchdog Challenges $268 Million GEICO Auto Insurance Rate Hike & Job- and Education-Based Insurance Discrimination

LOS ANGELES, California, Aug. 10 – Consumer Watchdog has released the following news:

Insurance Commissioner Ricardo Lara must reject GEICO’s offer $268 million The rise in car insurance rates and its approach to discrimination and education, wrote Consumer Watchdog in a complaint filed by California Department of Insurance (CDI) yesterday.

The increase will be especially difficult for working people in California. Drivers working in areas such as warehousing, construction, or food service will be paid 25% more than the “professional” drivers that GEICO favors, including lobbyists, architects and financial experts. They will pay about 11% more than engineers, accountants, and judges.

In all, the rate hikes will affect 2.1 million GEICO members $125 annual increase is required.

“Under GEICO’s discrimination waivers, investment bankers, consultants, surgeons, and lawyers will profit off the backs of low-income and blue-collar Californians,” said a Consumer Watchdog attorney. Daniel L. Sternberg.

At the same time that GEICO is proposing these cost increases, the company is closing offices in the state and laying off hundreds of employees. GEICO has also stopped selling insurance through mobile agents in the state, leaving online options via computer or mobile phone as the only way to get a GEICO policy in Californiaand many other countries.

“There should be little doubt that GEICO’s actions will hurt California drivers. The lack of internet is dangerous California to Many high risk areas are being left out when trying to get home and auto insurance. As we’ve seen with the COVID-19 vaccine, the digital divide can lead to huge disparities across racial groups in their ability to find work,” said Sternberg.

GEICO has received two rate hikes in the past California in 2017 and 2018 before the pandemic took drivers off the road and claims dropped.

The Insurance Commissioner has failed to act to prevent discrimination in employment and education.

Consumer Watchdog called on Commissioner Lara to deny GEICO’s job and training program to increase the number of Californians who work at this rate, and to enact a law requiring all insurance companies to cover Californians regardless of their job or education.

Consumer Watchdog and 10 community organizations and civil rights activists have accused auto insurers of using unfair and discriminatory practices and training to set premium rates. February 2019. In September 2019a Department of Insurance Research has confirmed these claims, finding a “significant financial disparity” created by insurance companies that is on the rise. California drivers relying on nothing more than their work or training. After three years, Commissioner Lara did not establish a law to prohibit this practice, and the final draft of the law that could be done was presented by a. Department of Insurance about a year and a half ago.

Consumer Watchdog has issued a complaint recently The opinion of the company Mercury Insurance Company and Interinsurance Exchange of the Automobile Club (“Auto Club“) price hikes that also use the job promotion and education system.

“Commissioner Lara needs to support working families and enact legislation to stop tax deductions. Instead of cracking down on these discriminatory deductions, the Commissioner should use his voter-elected authority under Proposition 103 to protect middle- and low-income families from being charged higher rates because of their jobs,” said Sternberg.

Read Consumer Watchdog’s Petition for Hearing and Petition to Intervene

Read the 2019 community and human rights petition:

Employment has not been legislated as a legal requirement under the proposed vote on Proposition 103. GEICO’s policy of unfair discrimination means that drivers with lower incomes and less education continue to be paid the highest wages based on their job titles.

Voter-approved Proposition 103 requires car insurance premiums to be based on three key factors – a vehicle’s safety record, annual mileage, and years of driving – and prohibits unfair discrimination. Proposition 103 prohibits such unfair discrimination based on income or race.


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