Estimated reading time: 11 minutes.
Key facts
- What happened: New Jersey's Department of Banking and Insurance (DOBI) announced on October 20, 2026 that GEICO returned more than $10.5 million in wrongly charged auto insurance premiums to more than 15,000 New Jersey policyholders and agreed to pay a $1.2 million penalty.
- The order: A consent order signed by Acting Commissioner Susan Ochs on October 20, 2026, which also adopts a 41-page market conduct examination report. GEICO signed it on September 28, 2026 and waived its right to a hearing.
- The companies: Government Employees Insurance Company, GEICO Secure Insurance Company, GEICO Choice Insurance Company, GEICO Indemnity Company and GEICO Casualty Company, all part of Berkshire Hathaway.
- What examiners found: Four improper general business practices, covering premiums that did not follow approved rates, improper midterm cancellations, flawed nonrenewal questionnaires, and failure to tell owners who kept totaled cars about their salvage rights.
- The period reviewed: Private passenger auto policies from June 1, 2023 to May 31, 2024, with one rating problem traced into 2025.
- Status: The refunds in the report were issued during the examination. There is no claim form. This is a state administrative settlement, not a court case.
In this article
- What New Jersey announced
- How the premium errors happened
- Where the refund money came from
- Cancellations and nonrenewals
- Total loss and claims findings
- What GEICO must do now
- What GEICO says
- Timeline
- Who may be affected and what you can do now
- What remains unresolved
- What happens next
- Frequently asked questions
What New Jersey announced
DOBI regulates insurance companies doing business in New Jersey. One of its tools is a market conduct examination, a review in which state examiners pull samples of an insurer's policy, cancellation and claim files and check them against state law.
According to the department, it opened the GEICO examination in September 2024 after receiving consumer complaints. The examiners reviewed GEICO's private passenger auto business remotely from September 4, 2024 to March 28, 2025, and kept some targeted reviews open until October 9, 2025.
"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," Acting Commissioner Susan Ochs said in the announcement.
The October 20, 2026 consent order resolves the examination. GEICO agreed to pay a $1,200,000 administrative penalty to the State of New Jersey, to follow the report's recommendations, and to keep monitoring its underwriting, termination and claims operations. The order lets DOBI reexamine GEICO within 12 months to check compliance.
A consent order is a negotiated settlement GEICO agreed to the order and waived a hearing. The order adopts the examiners' report as an official department record, but this is an administrative resolution, not a court judgment.
How the premium errors happened
Most of the refund money traces to GEICO moving customers between its own companies. GEICO writes New Jersey auto policies through five affiliated insurers. Government Employees Insurance Company, which the report calls GE, has traditionally focused on preferred risks. GEICO Indemnity, which the report calls GI, writes a wider range of drivers. A move from GE to GI at renewal could mean a higher premium.
The examiners found two problems that wrongly pushed customers out of GE:
Lending losses. GEICO defines a lending loss as an accident involving someone the customer lent a vehicle to who was not listed as a driver on the policy. The examiners found that underwriters labeled ordinary collision or personal injury protection claims as lending losses. In the review period, GEICO moved 14,362 policies from GE to GI for lending loss reasons, and 2,251 of those moves, or 16%, were mistakes. The errors affected renewals effective from July 30, 2023 until the problem was resolved effective February 18, 2024.
Accident forgiveness. Accident forgiveness waives the surcharge for a qualifying accident. The examiners found that underwriters failed to apply it correctly. GEICO moved 14,123 policies from GE to GI over accident forgiveness evaluations, and 4,662 of those moves, or 33%, were mistakes. These errors affected renewals effective from July 30, 2023 through May 31, 2024, when GEICO made a system change to stop tier moves for forgiven losses.
A third problem involved rate capping, which limits how much a premium can rise at once. When GEICO converted policies to a new rating plan on March 27, 2024, system logic flaws applied the wrong capping factors, and a fix applied on March 29, 2024 introduced new errors. Of 12,605 affected GE and GI policies, 9,714 were owed refunds.
The report says GEICO knew of incorrect underwriting decisions before the examination and did not correct the issue. GEICO told examiners it was aware of periodic underwriting problems but not of the systemic errors or their scale.
Where the refund money came from
The figures below come from the adopted examination report. Added together, they come to about $10.65 million, which is consistent with DOBI's description of more than $10.5 million returned.
| Problem | Refunds or credits reported |
|---|---|
| Lending loss transfers, before the exam | $1,705.99 |
| Lending loss transfers, after examiner intervention | $1,755,083.20 |
| Lending loss errors in a 274-policy GEICO self-audit | $65,103.73 |
| Accident forgiveness transfers, after examination findings | $6,744,192.26 |
| Accident forgiveness errors in a 260-policy GEICO self-audit | $10,813.58 |
| Rate capping errors, 9,714 policies | $2,076,482.50 |
The report says GEICO issued no accident forgiveness refunds before the examination, even for 140 policies it had already moved back to GE. All rate capping refunds and credits were issued by May 22, 2025. The report also says GEICO was still identifying other customers who may have been overcharged by tier changes within the same company, and that it would report those refunds to the department later.
Refunds already went out The report describes these refunds as issued. DOBI requires each refund to come with a notice saying the billing errors were found during a Department of Banking and Insurance market conduct examination. If you were a New Jersey GEICO customer in 2023 to 2025, check your past statements and mail for that wording.
Cancellations and nonrenewals
New Jersey law limits the reasons an insurer can cancel an auto policy in the middle of its term. Outside the first 60 days, most problems must wait for nonrenewal at the end of the term.
The examiners found GEICO cancelled policies midterm for reasons the rule does not allow, including six policies over ridesharing, one over the number of claims, and three over food or goods delivery use. A wider review found 49 more policies cancelled more than 60 days after they started, with notices that wrongly said the policy was still in its first 60 days. GEICO said these were underwriter execution errors and agreed the policies should have stayed in force until nonrenewal.
Why midterm cancellation rules matter A midterm cancellation can leave a driver suddenly uninsured and looking for new coverage. Under New Jersey rules, most underwriting concerns that arise after the first 60 days must wait until the end of the policy term.
The examiners also cited GEICO's use of renewal questionnaires. State rules require an insurer to warn a customer one full policy cycle ahead that failing to return a renewal questionnaire may lead to nonrenewal. The examiners found four nonrenewals for failing to return a questionnaire without that warning, and nine questionnaire letters that lacked the required language. GEICO disagreed with part of this finding, saying the forms were general questionnaires, but the examiners did not accept that argument.
Total loss and claims findings
When an insurer declares a car a total loss and the owner keeps it, New Jersey rules require the insurer to explain the owner's salvage rights in writing. Examiners found eight files where GEICO did not, and GEICO agreed. Because of the impact, the report cites this as an improper general business practice.
The claims review otherwise found a 2% error rate in random samples. Examples include a claim where a $250 deductible was applied twice, late claim payments without the required delay notices, and two claims where GEICO was slow to get a police report before deciding fault.
What GEICO must do now
Under the consent order and report, GEICO must:
- Review all policies affected by the lending loss, accident forgiveness and rate capping errors and report every refund or credit to DOBI, by policy.
- Revise underwriting procedures so policies are rated according to the rates filed with and approved by the state.
- Limit midterm cancellations to reasons allowed by regulation and correct its 60-day notice language.
- Add the required warning language to renewal questionnaires.
- Give written notice of salvage rights to owners who keep totaled vehicles.
- File an affidavit within 30 days of adoption confirming that its directors received the report.
What GEICO says
GEICO told NJ.com it was pleased to have settled the matter with the state. "GEICO has already taken steps to address the department's recommendations," the company said in a statement. "GEICO remains committed to its customers and to growing in the state and has recently lowered rates in New Jersey."
A GEICO spokesperson added that the exam covered June 2023 to May 2024 and that "billing adjustments have already been implemented for impacted customers." DOBI said GEICO voluntarily began issuing refunds during the examination as errors were identified.
Timeline
| Date | Event |
|---|---|
| June 1, 2023 | Start of the examination review period |
| July 30, 2023 | Renewals start to be affected by lending loss and accident forgiveness transfer errors |
| February 18, 2024 | Lending loss transfer errors resolved, according to GEICO |
| March 27, 2024 | GEICO converts policies to a new rating plan; capping errors begin |
| May 31, 2024 | End of the review period; accident forgiveness transfer errors resolved |
| September 4, 2024 | DOBI examiners begin the examination |
| May 22, 2025 | All rate capping refunds and credits issued |
| September 28, 2026 | GEICO signs the consent order |
| October 20, 2026 | Order signed, report adopted and settlement announced |
Who may be affected and what you can do now
You may have been affected if you had a GEICO private passenger auto policy in New Jersey between mid-2023 and mid-2025, especially if your policy moved to GEICO Indemnity at renewal, your premium rose after an accident you expected to be forgiven, or your policy was cancelled midterm.
There is no claim form. The report describes refunds that GEICO has already paid or credited. If you believe you were overcharged and did not receive a correction, you can contact GEICO, or file a complaint with DOBI's Consumer Protection Services at 1-800-446-7467.
This is a regulatory settlement, not a class action. For lawsuits and settlements open to the public, see our list of class action cases you can join.
What remains unresolved
- Additional refunds. The report says GEICO was still assessing refunds for customers affected by tier changes that did not involve a transfer between companies.
- Exact customer counts. DOBI says more than 15,000 policyholders received money back. The report gives counts by problem, and some customers may appear in more than one category.
- Penalty use. The order directs payment to the State of New Jersey but does not say how the money will be used.
- Reexamination. DOBI may reexamine GEICO within 12 months, and no reexamination had been announced when we reviewed the record.
This article is for information only and is not legal advice.
What happens next
GEICO must pay the penalty, file its affidavit, and report its remaining refunds to DOBI during the compliance phase. The department can then decide whether to reexamine the company. We will update this story if more refunds are announced.
Frequently asked questions
Why did GEICO pay a penalty in New Jersey?
A DOBI market conduct examination found GEICO charged premiums that did not follow its state-approved rates, cancelled some policies improperly, used flawed nonrenewal questionnaires, and failed to explain salvage rights on totaled cars. GEICO agreed to a $1.2 million penalty to resolve the findings.
How much money was returned to customers?
DOBI says more than $10.5 million was returned to more than 15,000 policyholders. The refund figures listed in the examination report add up to about $10.65 million.
Do I need to file a claim to get a GEICO refund?
No. There is no claim process. The report describes refunds and credits GEICO already issued. If you think you were missed, contact GEICO or DOBI.
What is a lending loss?
GEICO uses the term for an accident involving a driver the customer lent a vehicle to who was not listed on the policy. Examiners found GEICO wrongly labeled ordinary claims as lending losses.
Is this a class action settlement?
No. It is an administrative consent order between GEICO and New Jersey's insurance regulator. No court has certified a class or approved a class settlement.
Which GEICO companies are covered?
Government Employees Insurance Company, GEICO Secure Insurance Company, GEICO Choice Insurance Company, GEICO Indemnity Company and GEICO Casualty Company.
