GEICO Must Refund $10.5M To Overcharged NJ Policyholders, Pay $1.2M Penalty

GEICO and its affiliates must return more than $10.5 million in wrongfully charged premiums to New Jersey policyholders and pay a $1.2 million penalty after a state examination found improper business practices affecting more than 15,000 people.

This enforcement action followed a market conduct exam by New Jersey’s Department of Banking and Insurance. which began in September 2024 after consumer complaints raised concerns about GEICO’s practices.

The exam covered Government Employees Insurance Company, Geico Secure Insurance Company, Geico Choice Insurance Company, Geico Indemnity Company and Geico Casualty Company.

The state said the examination found a systemic pattern of improper practices across multiple GEICO companies.

The company was cited in four areas: charging rates higher than what had been approved by the department, canceling policies for improper reasons, failing to disclose required language on notices that could lead to policy nonrenewal, and failing to make total loss vehicle owners who keep their vehicles after settlement aware of their rights.

"Consumer protection is at the heart of our mission here at the Department of Banking and Insurance, and we will continue to work aggressively to end bad business practices that are harming New Jersey consumers," Acting Commissioner Susan Ochs said. "This penalty settlement and the corresponding refunds to policyholders demonstrate our commitment to fostering the trusted, accountable, healthy marketplace that will best serve New Jerseyans."

Based on the findings, the state issued an examination report with findings and recommendations to correct procedures that adversely affect consumers or do not comply with New Jersey laws.

The state said GEICO voluntarily began issuing refunds during the examination process as the errors were identified.

The Market Conduct Examinations Unit, which is part of the Office of Consumer Protection Services, reviews insurance company and agency operations and business practices to determine whether consumers, medical providers and other members of the public are being treated fairly and in compliance with approved policies and New Jersey insurance laws.

The department said the process also helps promote fair competition, combat insurance fraud and protect consumers from practices that are improper, misleading, deceptive or otherwise contrary to state law.

New Jersey residents with questions about the enforcement action, or who want to file a formal complaint against an insurance company operating in the state, can file online or contact the department’s Consumer Hotline at 1-800-446-7467 or 609-292-7272.