Client Watchdog Challenges $268 Million GEICO Auto Insurance coverage Price Hike & Job- and Schooling-Primarily based Insurance coverage Price Discrimination – PR Newswire

August 17, 2022 By admin

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LOS ANGELES, Aug. 9, 2022 /PRNewswire/ — Insurance coverage Commissioner Ricardo Lara ought to reject GEICO’s proposed $268 million auto insurance coverage fee hike and its job- and education-based discriminatory score system, wrote Client Watchdog in a petition filed with the California Division of Insurance coverage (CDI) yesterday.
The rise falls hardest on working-class Californians. Drivers working in fields like custodial, building, or meals service can pay 25% larger premiums than drivers in GEICO’s most popular "skilled" occupations, together with lobbyists, architects and monetary analysts. They’ll pay virtually 11% greater than engineers, auditors, and judges.
General, the speed hike will affect 2.1 million GEICO policyholders who face a median $125 annual premium improve.
"Underneath GEICO’s discriminatory reductions, funding bankers, consultants, surgeons, and attorneys will profit on the again of low-income and blue-collar Californians," mentioned Client Watchdog lawyer Daniel L. Sternberg.
On the similar time GEICO is looking for this fee hike, the corporate is closing its native places of work within the state and shedding lots of of workers. GEICO has additionally stopped promoting insurance coverage via phone brokers within the state, leaving on-line choices via a pc or a cell system as the one option to acquire a GEICO coverage in California, and lots of different states.
"There must be little doubt that GEICO’s actions will damage California drivers. The dearth of web entry dangers California’s most susceptible communities being left behind in making an attempt to safe dwelling and auto insurance coverage. Simply as we noticed with the COVID-19 vaccine, the digital divide could cause critical disparities in communities of shade of their skill to entry companies," mentioned Sternberg.
GEICO acquired two prior fee hikes in California in 2017 and 2018 earlier than the pandemic took drivers off the highway and claims plummeted.
The Insurance coverage Commissioner has did not act on a regulation to curb job- and education-based fee discrimination.
Client Watchdog known as on Commissioner Lara to reject GEICO’s use of job and training to overcharge working-class Californians on this fee submitting, and transfer a regulation ahead to make all insurance coverage corporations fee Californians pretty no matter their job or training stage.
Client Watchdog and 10 neighborhood and civil rights organizations challenged auto insurers’ unlawful and discriminatory use of job and training to set charges in February 2019. In September 2019, a Division of Insurance coverage investigation confirmed these issues, discovering "large socioeconomic disparities" created by insurance coverage corporations surcharging California drivers primarily based on nothing greater than their occupation or instructional standing. Three years later, Commissioner Lara has but to undertake a regulation to cease the follow, and the final draft of a possible regulation was issued by the Division of Insurance coverage almost a 12 months and a half in the past.
Client Watchdog has not too long ago filed challenges towards Mercury Insurance coverage Firm’s and Interinsurance Change of the Car Membership’s ("Auto Membership") fee hikes that additionally make the most of a job- and education-based discriminatory score system.
"Commissioner Lara wants to assist working households and undertake laws to cease occupation-based premium surcharges. As an alternative of rubber-stamping these discriminatory reductions, the Commissioner ought to use his voter-enacted authority beneath Proposition 103 to guard middle- and low-income households from being charged larger costs primarily based on their jobs," mentioned Sternberg.
Learn Client Watchdog’s Petition for Listening to and Petition to Intervene: https://consumerwatchdog.org/websites/default/recordsdata/2022-08/2022-08-08percent20GEICOpercent20PFH.pdf 
Learn the neighborhood and civil rights teams’ 2019 petition: https://consumerwatchdog.org/websites/default/recordsdata/2019-02/Jobpercent26EducationPetition.pdf
Occupation has by no means been authorised by regulation as a lawful score issue beneath voter-enacted Proposition 103. GEICO’s unfairly discriminatory occupation-based score system means decrease revenue and less-educated drivers proceed to pay the best premiums primarily based solely on their job titles.
Voter-approved Proposition 103 requires auto insurance coverage premiums be primarily based totally on three obligatory components – driving security document, annual mileage, and years driving expertise – and prohibits unfairly discriminatory charges. Proposition 103 prohibits this sort of unfair fee discrimination primarily based on revenue or race.
SOURCE Client Watchdog
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