This is the case of Day v. Geico Casualty Co. et al., in the U.S. District Court for the Northern District of California.

This lawsuit concerns a premium credit program that was run by Defendants GEICO Casualty Company, GEICO General Insurance Company, and GEICO Indemnity Company (“GEICO”).

The plaintiff alleges that at the beginning of the COVID-19 pandemic in April 2020, GEICO announced their “GEICO Giveback” program that provided a 15% discount on new and renewed insurance policies.

According to the record, Plaintiff Jessica Day accuses GEICO of engaging in unfair business practices by failing to provide additional refunds even though fewer claims were being reported as a result of fewer miles driven and fewer vehicle accidents.

Relevant Factual and Procedural Background

The plaintiff moved to certify a class including “[a]ll California residents who purchased automobile, motorcycle, or RV insurance from GEICO covering any portion of the time period from March 1, 2020, to the present.”

Geico, who is represented by Damon N. Vocke, Ronald M. Lepinskas, and Daniel B. Heidtke of Duane Morris LLP, opposed class certification claiming it was improper.

On Monday, A federal judge in San Jose, Ca. ruled that the suit can proceed as a class action, finding that the two-million policyholders' claims are worthy of class treatment.

The order of Judge Beth Labson Freeman of the U.S. District, states that the class shall include any California resident who has a Geico personal auto, motorcycle, or RV policy covering any period since March 2020.

Judge Freeman also said that the plaintiff had pointed to common questions of law and fact and had proposed a damages model that is capable of accurately calculating damages to the class members.

Geico’s Argument Against Class Certification

Counsel for Geico vehemently argued that a class lawsuit would be unmanageable because of the many differences among policyholders and the complexities of the Plaintiff’s damages model, as well as issues of timing.

Judge Freeman did not agree, instead stating in her order, that the damages model already accounts for the differences Geico cites, and if timing becomes an issue in the future, Geico could request decertification at that time.

The judge also pointed out that Day had identified questions of law or fact that are common to the class, and those questions include whether Geico had a general policy or business practice of overcharging rates that were not based on an accurate risk assessment and whether it was routine for the insurer to fail to provide adequate refunds to its policyholders.

According to the record, Plaintiff Day alleges that Geico uniformly began a one-time 15% premium credit to policyholders without taking into consideration individual circumstances, such as driving habits. Day also alleges unfair business practices and a breach of the covenant of good faith and fair dealing.

In March 2021, Day filed her lawsuit accusing Geico of "unfairly profiting" from premiums they received during the pandemic, particularly during the time mandatory lockdowns were in place and there were fewer drivers on the roads.

According to the complaint, in April 2020, the number of miles that Californians traveled decreased by as much as 77%. Day cited to a joint report from the Consumer Federation of America and the Center for Economic Justice which found that a minimum 30% premium refund would have been the appropriate percentage during the pandemic's first six weeks alone.

Day also cited to a March 2021 report from the California Department of Insurance which found that insurers should have returned or rebated 17% of premiums earned between March and September 2020 to policyholders due to decreased road risks during the statewide lockdown orders.

Geico Failed to Provide Adequate Refunds to 2M Policyholders

Although Geico did provide a 15% rebate for new policyholders or renewing policies during a certain time frame, Day argues that the insurer should have provided more of its windfall profits, to its customers.

Given the nature of the claims in Day’s complaint, the judge said a class action would be better than 2M individual lawsuits on the same issue.

Day Appointed Class Representative

Day asked for class certification in May. On Monday, Judge Freeman appointed Day as class representative and her attorneys with Nichols Kaster PLLP, Stephan Zouras LLP and Poulin Willey Anastopoulo LLC as class counsel.

In her order, Judge Freeman noted "Plaintiff also points to common evidence to prove these claims, including proof that Geico recognized the need to provide relief; evidence of the parameters of the Geico Giveback program; evidence of how the Giveback was applied uniformly to class members; and evidence addressing whether the Giveback was sufficient to remedy excessive premiums paid in light of the pandemic."

Conclusion

The Court certified that all California residents who purchased automobile, motorcycle, or RV insurance from Geico covering any portion of the time period from March 1, 2020, to the present, shall be members of the class.