GEICO agrees to settle deceptive automobile insurance rate quote charges
GEICO, a subsidiary of Berkshire Hathaway, has agreed to pay $6m to settle the Consumer Federation of California (CFC) complaint related to the violation of civil rights and insurance law.
The company is said to have violated the civil rights and insurance law by targeting low and moderate-income women and unmarried motorists with deceptive and inflated automobile insurance rate quotes.
Under the settlement, GEICO will also need to change its website to offer all good drivers an initial quote for identical coverage, without regard to marital status, gender, educational attainment, occupation or current insurance status.
Consumer Federation of California executive director Richard Holober said: "GEICO is paying a price for its unfair practices, and the settlement assures that all good drivers are treated equally, whether rich, poor, or in between."
The firm will also be sanctioned an additional $6m, if the Department of Insurance determines that it is not complying with the settlement terms during the next three years.
GEICO includes around one million auto policyholders in California, who compensate over a billion dollars per year for their coverage.