Your Forgiven Accident Can Still Raise Your Rate. In New Jersey, Geico Got It Wrong 4,662 Times.

If you had a crash, were told accident forgiveness covered it, and your renewal still jumped, read your declarations page. The name of the insurance company printed on it may have changed.

That’s what happened to thousands of Geico customers in New Jersey. On October 20, the state’s Department of Banking and Insurance adopted an exam that found Geico misapplied accident forgiveness and shuffled drivers into a pricier sister company. Refunds and credits now top $10.5 million, plus a $1.2 million penalty Geico agreed to without a hearing.

The forgiveness that wasn’t

Accident forgiveness is supposed to waive the surcharge for a qualifying crash. Geico told examiners the standard version costs nothing and an “Upgraded” version carries a premium.

Geico writes New Jersey policies through five companies. Between June 2023 and May 2024, it moved 14,123 policies from Government Employees Insurance Company to GEICO Indemnity Company over accident forgiveness rating. Examiners found 4,662 of those moves, a third, were wrong.

Now the damning part. Before the exam, Geico refunded $0 on those errors. After examiners found them, it paid $6,744,192.26. Spread across the 4,662 bad moves, that’s about $1,450 each. The report says Geico “was aware of the incorrect underwriting decisions prior to the examination and failed to correct the issue.”

Lending losses went the same way. Examiners found plain collision and PIP claims coded as “lending losses,” Geico’s term for a crash by someone you lent the car to who isn’t on your policy. Of 14,362 policies moved for that reason, 2,251 were wrong. Pre-exam refunds: $1,705.99. Post-exam: $1,755,083.20. A separate rate capping glitch added about $2.08 million across 9,714 policies.

What it means for you

A forgiven accident isn’t free if the insurer simply moves you to a different company with higher rates. And the error rate wasn’t a fluke: in a Geico self-audit of 260 policies with an at-fault loss, 26 were misrated.

The pattern is the real story. The money came back when a regulator asked, not when customers called. In this state, examiners only started looking because people complained.

Do this at your next renewal

Compare the insurer name on your new declarations page with last term’s. If it changed after a claim, ask in writing why, and ask whether accident forgiveness was applied.

Ask how the claim is coded. If you were driving, it shouldn’t be listed as an undisclosed driver or lending loss. Pull your free C.L.U.E. report (here’s how) and check that it matches.

If the answer doesn’t add up, file a complaint with your state insurance department. In New Jersey, the hotline is 1-800-446-7467. Then get quotes; our best auto insurance picks are a place to start.

The detail

The exam also cited Geico for improper midterm cancellations, nonrenewal questionnaires that didn’t warn drivers a missed reply could cost them the policy, and failing to tell owners who kept a totaled car about their salvage rights. The report says Geico was still assessing other policies hurt by tier changes, so more New Jersey refunds may follow.

How Candid Yak makes money. Some of the products we write about pay us if you apply or sign up through our links. That never changes our verdict, our rankings, or the numbers in this article. We call a bad deal a bad deal whether it pays us or not. Some brands shown in our comparison tools are placeholder examples while we finalize partner agreements, and we label them as such.