Nationwide Race Discrimination Suit Filed against GEICO

MINNEAPOLIS--()--April 3, 2006--Cohen, Milstein, Hausfeld & Toll, PLLC (Washington, DC) and Nichols Kaster & Anderson (Minneapolis) filed a nationwide class action lawsuit today against GEICO alleging that the company discriminates against African Americans/Blacks by regularly charging them higher insurance premiums than it charges Caucasians with the same driving records. They filed suit in the United States District Court for the District of Minnesota in Minneapolis.

The complaint alleges that GEICO, the fourth largest private-passenger auto insurer in the United States, with over seven million policyholders, uses occupation and level of education of its policyholders to determine the premiums it charges them. As a result, customers with less education and/or hold occupations that require no more than a high school diploma are considered a greater risk -- and thus charged higher premiums -- than customers with more education and/or hold occupations that require advanced degrees. GEICO uses these factors in 43 states and the District of Columbia.

Instead of correlating with risk, these factors correlate with race. According to a March 25, 2005, U.S. Census report, 30.6% of Caucasians possess a bachelor's degree or higher, while only 17.6% of Africans Americans/Blacks have such education. Well aware of these differences in average education levels for Caucasians and African American/Blacks, GEICO's use of education and occupation reflects the knowing and purposeful use of race to set its auto insurance rates.

Nor did GEICO disclose its use of education level and occupation to the public or to the state insurance commissioners. Instead, they are hidden among the company's underwriting criteria, rather than disclosed among its rate information.

The plaintiffs are asking the Court to declare GEICO's policy and practice discriminatory, and issue an injunction prohibiting the use of occupation and level of education as factors in GEICO's underwriting policies. The plaintiffs are also seeking monetary relief to redress the alleged discrimination.

"GEICO exploits the racial divide in America by linking its auto insurance rates to the levels of education and occupations of its policy holders," said Joseph M.Sellers, a partner with Cohen, Milstein in Washington who represents the plaintiffs. "Exploiting widely recognized and longstanding differences in education attained by African Americans and Caucasians in America, GEICO has linked its auto insurance rates to the levels of education and occupations of its policy holders. GEICO divides this nation by presuming that people with limited education pose greater insurance risks than do well-educated people, a stereotype that is belied by driver behavior on every road in this country."

A copy of the Complaint is available at www.cmht.com

If you have any information about these practices or you believe that you have been discriminated against by GEICO, please call, toll free: 877-504-4454.

Contacts

Media Relations, Inc.
Deborah Schwartz, 301-897-8838 or 240-355-8838

Contacts

Media Relations, Inc.
Deborah Schwartz, 301-897-8838 or 240-355-8838