NJ Department of Banking and Insurance Recoups More Than $10.5 Million for Auto Insurance Consumers Overcharged by GEICO

TRENTON, NJ —Today, the New Jersey Department of Banking and Insurance announced a significant enforcement action against Government Employees Insurance Company (GEICO), driving the return of over $10.5 million in wrongfully-charged premium back to New Jersey policyholders. As part of its increased enforcement efforts to protect consumers and ensure accountability and affordability in the marketplace, the Department also issued a penalty in the amount of $1.2 million to GEICO and its affiliates for improper business practices.

These results are the outcome of a market conduct exam, released today, that was initiated in September 2024 in response to consumer complaints. During the course of the examination, the Department identified what proved to be a systemic pattern of improper practices affecting more than 15,000 policyholders across multiple GEICO companies. This action reflects the Department’s heightened focus on holding regulated entities accountable when their conduct harms New Jersey consumers, particularly adding improper costs when affordability is already a challenge.

“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,” said Acting Commissioner Susan Ochs. “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.”

Beginning in September 2024, after consumer complaints noted concerns about GEICO’s practices, the Department’s Market Conduct Examinations Unit, within the Office of Consumer Protection Services, initiated a market conduct examination of Government Employees Insurance Company, Geico Secure Insurance Company, Geico Choice Insurance Company, Geico Indemnity Company and Geico Casualty Company. The examination cited the company in four areas: charging rates higher than what were previously approved by the Department; cancelling 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 retain the vehicle after settlement aware of their rights. Based on the findings of the examination, the Department issued an examination report that includes findings and recommendations to correct company procedures that adversely affect consumers or do not comply with New Jersey laws. GEICO voluntarily began issuing refunds during the examination process as the errors were identified.

The Market Conduct Examinations Unit conducts examinations of insurance company and agency operations and business practices to determine whether consumers, medical providers and other members of the public are being treated in a manner that is fair, in compliance with approved policies, and in accordance with New Jersey insurance laws. The unit examines life, health, managed care, and property and casualty companies, with specialty lines reviewed as appropriate.  For insurers that are subject to the New Jersey Insurance Fraud Prevention Act and transact private passenger automobile or health insurance in the state, examinations also include a review to determine compliance with fraud prevention, detection and reporting standards required by law. The market conduct examination process helps to promote fair competition in the marketplace, combat insurance fraud, and protect consumers from practices that are improper, misleading, deceptive or otherwise contrary to state insurance laws.

New Jersey residents who have questions about this enforcement action, or who wish to file a formal complaint against any insurance company operating in the state, can file online or contact the Department’s Consumer Hotline at 1-800-446-7467 and 609-292-7272.