Shopper Watchdog Challenges $268 Million GEICO Auto Insurance coverage Price Hike & Job- and Training-Based mostly Insurance coverage Price Discrimination – PR NewswireAugust 17, 2022
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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 price hike and its job- and education-based discriminatory ranking system, wrote Shopper 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 pays 25% larger premiums than drivers in GEICO’s most well-liked "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 enhance.
"Beneath GEICO’s discriminatory reductions, funding bankers, consultants, surgeons, and attorneys will profit on the again of low-income and blue-collar Californians," stated Shopper Watchdog legal professional Daniel L. Sternberg.
On the similar time GEICO is looking for this price hike, the corporate is closing its native workplaces within the state and shedding a whole lot of workers. GEICO has additionally stopped promoting insurance coverage by way of phone brokers within the state, leaving on-line choices by way of a pc or a cell machine as the one method to receive a GEICO coverage in California, and lots of different states.
"There ought to be little doubt that GEICO’s actions will harm California drivers. The shortage of web entry dangers California’s most weak communities being left behind in making an attempt to safe residence and auto insurance coverage. Simply as we noticed with the COVID-19 vaccine, the digital divide may cause severe disparities in communities of colour of their capability to entry companies," stated Sternberg.
GEICO acquired two prior price hikes in California in 2017 and 2018 earlier than the pandemic took drivers off the highway and claims plummeted.
The Insurance coverage Commissioner has didn’t act on a regulation to curb job- and education-based price discrimination.
Shopper Watchdog known as on Commissioner Lara to reject GEICO’s use of job and schooling to overcharge working-class Californians on this price submitting, and transfer a regulation ahead to make all insurance coverage firms price Californians pretty no matter their job or schooling degree.
Shopper Watchdog and 10 group and civil rights organizations challenged auto insurers’ unlawful and discriminatory use of job and schooling to set charges in February 2019. In September 2019, a Division of Insurance coverage investigation confirmed these issues, discovering "extensive socioeconomic disparities" created by insurance coverage firms 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 apply, and the final draft of a possible regulation was issued by the Division of Insurance coverage almost a yr and a half in the past.
Shopper Watchdog has just lately filed challenges in opposition to Mercury Insurance coverage Firm’s and Interinsurance Trade of the Car Membership’s ("Auto Membership") price hikes that additionally make the most of a job- and education-based discriminatory ranking system.
"Commissioner Lara wants to assist working households and undertake rules to cease occupation-based premium surcharges. As a substitute of rubber-stamping these discriminatory reductions, the Commissioner ought to use his voter-enacted authority below Proposition 103 to guard middle- and low-income households from being charged larger costs primarily based on their jobs," stated Sternberg.
Learn Shopper Watchdog’s Petition for Listening to and Petition to Intervene: https://consumerwatchdog.org/websites/default/recordsdata/2022-08/2022-08-08percent20GEICOpercent20PFH.pdf
Learn the group and civil rights teams’ 2019 petition: https://consumerwatchdog.org/websites/default/recordsdata/2019-02/Jobpercent26EducationPetition.pdf
Occupation has by no means been accepted by regulation as a lawful ranking issue below voter-enacted Proposition 103. GEICO’s unfairly discriminatory occupation-based ranking system means decrease earnings and less-educated drivers proceed to pay the very 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 report, annual mileage, and years driving expertise – and prohibits unfairly discriminatory charges. Proposition 103 prohibits this sort of unfair price discrimination primarily based on earnings or race.
SOURCE Shopper Watchdog
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