Texas Lawsuit Claims GEICO Misled Customers on Accident Forgiveness

A class action lawsuit has been filed in Texas against GEICO, alleging that the company has falsely advertised its "Accident Forgiveness" benefit. The plaintiff, Christopher Cude, asserts that despite being promised premium protection after an at-fault accident, his insurance premium soared by over 91% after such an event. In the lawsuit, it is claimed that GEICO misrepresented the benefits of their accident forgiveness policy, leading consumers to believe that their premiums would not increase following their first at-fault accident.

Cude's complaint alleges breaches of the Texas Deceptive Trade Practices Act, claiming that GEICO unlawfully profited from increased premiums while denying the nature of the premium hike by labeling it a surcharge instead. The lawsuit argues that GEICO’s behavior is inequitable and unjust, as it has taken financial gains at the expense of policyholders who have faced unexpected costs.

As GEICO's parent company, Berkshire Hathaway, reported significant operating earnings in recent quarters, concerns have arisen regarding the fairness of practices within its insurance division. The case is currently pending, with GEICO yet to respond formally to the allegations made in court.