In a major enforcement action aimed at protecting local consumers, the New Jersey Department of Banking and Insurance (DOBI) announced that it has successfully secured more than $10.5 million in refunds for auto insurance policyholders overcharged by Government Employees Insurance Company (GEICO). Additionally, the state has levied a $1.2 million penalty against GEICO and its affiliates for systemic business practices that violated insurance laws.
The enforcement stems from a comprehensive market conduct examination launched in September 2024 following an influx of consumer complaints. The probe revealed a widespread pattern of improper practices affecting upwards of 15,000 policyholders across multiple GEICO companies.
The DOBI’s Market Conduct Examinations Unit uncovered multiple areas where GEICO failed to comply with New Jersey insurance regulations and approved filings. According to the examination report, the infractions spanned four major categories:
- Overcharging Rates: Charging consumers higher rates than those previously approved by the Department.
- Improper Terminations: Cancelling customer policies for unauthorized reasons.
- Noncompliance on Notices: Failing to include mandatory legal language on notices that could potentially lead to policy nonrenewals.
- Total Loss Violations: Failing to properly inform vehicle owners who retained their vehicle after a total loss settlement of their legal rights.
Acting Commissioner Susan Ochs emphasized that accountability remains a top priority for the Department, especially as affordability concerns weigh heavily on New Jersey residents.
“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,” Ochs said. “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.”
As the errors were identified during the course of the examination, GEICO voluntarily began issuing refunds to impacted policyholders.
The state’s market conduct examinations routinely evaluate life, health, and property and casualty insurers to ensure fair treatment, compliance with state laws, and adherence to fraud prevention standards.
New Jersey residents with questions regarding the GEICO enforcement action—or those wishing to file a formal inquiry or complaint against an insurance provider—can visit the DOBI website online or reach the Department’s Consumer Hotline at 1-800-446-7467 or 609-292-7272.
