Texas Lawsuit Alleges GEICO Raises Premiums Despite Accident Forgiveness

A class action lawsuit filed in Texas alleges GEICO doesn’t abide by its Accident Forgiveness program when a driver with an unblemished record gets into a first, at-fault accident.

Texas resident Christopher Cude sued GEICO on Feb. 25, alleging the insurance carrier raised his auto premium 91% after his wife got into a minor fender bender accident in October 2024 at which she was at fault. Cude had qualified for GEICO’s accident forgiveness benefit upon his May 2024 auto insurance renewal. GEICO said it would waive the surcharge associated with the first at-fault accident caused by an eligible driver on the couple’s policy.

When Cude received a policy renewal letter in November, he learned his premium increased from $1,358 to $2,664. Cude reached out to GEICO for an explanation of the premium increase and to remind GEICO that he had Accident Forgiveness. A GEICO representative told him that his premium did not increase, but instead, the carrier merely applied a surcharge, the lawsuit alleges.

The class action accuses GEICO of misrepresenting it would not increase the premiums for its insured with accident forgiveness due to first at-fault accidents.

GEICO’s website says a customer’s insurance rate won’t go up due to a first qualifying accident. If there are multiple drivers on a policy, any of the eligible drivers may use this benefit once; after an eligible driver uses it, the benefit is no longer available for that policy, the website states.

GEICO has seen a reversal of fortunes in underwriting in recent years.

The carrier last month said it earned 2024 underwriting profit before taxes of $7.8 billion, more than double the $3.6 billion it earned in 2023. GEICO experienced a nearly $2 billion underwriting loss for 2022.

GEICO’s combined ratio of 81.5 for 2024 was a 9.2 points improvement on 2023 and more than 20 points better than 2022.

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