The suit, filed in Los Angeles Superior Court in January 2002, challenged the practice of disallowing certain discounts for drivers who could not demonstrate proof of prior insurance. GEICO has denied and continues to deny any wrongdoing or liability in the matter. Nevertheless, in the interest of avoiding continued legal expense and protracted litigation, GEICO and FTCR have resolved the litigation.
Under the terms of the settlement, GEICO will issue refunds to the approximately 4% of its current and former California customers who were affected by not having received the discount. The refund will average approximately $63.00 per customer. GEICO discontinued the challenged practice in April, 2003.
"While we do not agree with the allegations made by the plaintiffs in this matter, we are glad to resolve the litigation and put the issue behind us," said Nancy Pierce, a GEICO representative.
"We are pleased with this settlement," said consumer advocate Harvey Rosenfield, author of Proposition 103 and one of the attorneys representing FTCR. "GEICO customers who did not receive the discounts will receive refunds, without having to wait for the courts to resolve this dispute."
Using Business and Professions Code section 17200, FTCR brought suits on behalf of the general public against GEICO, the Auto Club of Southern California and Safeco for alleged violations of Proposition 103's "prior insurance" rule.
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