Class action alleges Geico was too stingy with pandemic relief

Geico may or may not save you a bunch of money on your car insurance, but the company’s facing a class action lawsuit for allegedly overcharging customers in the early days of the pandemic in 2020. The insurer offered credits to policyholders to compensate them for driving less, but many say the gesture didn’t go far enough.

In a San Jose, California, U.S. District courtroom, Judge Beth Labson Freeman gave the green light for a group of plaintiffs to file a class action suit against the insurance giant. Geico’s protest of the suit stated that a class action would be brutal to account for policy details and costs this long after the fact. Lawyers also noted that the suit would fail to account for differences between the lengths of time policyholders were customers and the variations in their policies.

Geico ponied up $2.5 billion in credits in 2020, with up to 15 percent on policy renewals. When COVID-19 almost completely shut the country down, nobody needed to drive, reducing the risk for insurers. Many big-name companies sent checks, gave policy credits, and offered other perks to customers in return.