GEICO Faces Class Action Lawsuit Over Deceptive Accident Forgiveness Policy

A recently filed class action lawsuit in the U.S. District Court for the Northern District of Texas alleges that GEICO engaged in deceptive and unfair practices regarding its Accident Forgiveness coverage. 

The lawsuit, brought by lead plaintiff Christopher Cude on behalf of similarly affected consumers, claims that GEICO misrepresented the benefits of its Accident Forgiveness policy, leading customers to believe their insurance rates would not increase after their first at-fault accident.

The Allegations Against GEICO

The lawsuit alleges that GEICO advertises its Accident Forgiveness policy as a way to prevent premium increases following a driver’s first at-fault accident. However, contrary to these representations, the plaintiff claims that his premium increased significantly after his wife was involved in a minor accident, despite being informed by GEICO that he had earned Accident Forgiveness.

The complaint further asserts that GEICO effectively circumvents its promise by applying a "surcharge" rather than a direct premium increase, thereby misleading consumers into believing they are protected from higher costs when, in reality, they are not. The lawsuit contends that this practice violates the Texas Deceptive Trade Practices Act, the Texas Insurance Code, and general principles of fair dealing.

Consumer Impact

The lawsuit seeks to represent all Texas consumers who purchased GEICO insurance with Accident Forgiveness and subsequently experienced an increase in their premiums after their first at-fault accident. According to the complaint, GEICO’s misleading practices have financially harmed policyholders who trusted the insurer’s promises of stability and fair pricing.

Additionally, the legal filing highlights GEICO’s massive advertising expenditures—over $1.5 billion in 2022 alone—as evidence of the company’s ability to influence consumer perceptions and decision-making. The plaintiffs argue that GEICO’s marketing efforts falsely assure policyholders of premium protection when, in practice, the company finds ways to increase rates.

Seeking Justice for Consumers

The lawsuit is seeking certification as a class action, damages for affected policyholders, and injunctive relief to prevent GEICO from continuing these alleged deceptive practices. If successful, this case could set a precedent for holding insurers accountable for misleading advertising and unfair pricing strategies.

At Morgan & Morgan, we believe in protecting consumer rights and holding corporations accountable for deceptive business practices. If you or someone you know has experienced similar issues with GEICO’s Accident Forgiveness policy, we encourage you to contact us for a consultation. Our experienced legal team of class action attorneys is committed to fighting for justice and ensuring that insurance companies uphold their promises to policyholders.

This case is ongoing, and we will continue to monitor developments. For updates on this lawsuit and other important consumer protection news, follow our blog and reach out to our team for more information.

Take Action Today

If you believe you have been affected by GEICO’s misleading Accident Forgiveness policy, contact us today for a free case evaluation. Our team is ready to help you understand your legal options and fight for the compensation you deserve.