HOUSTON – If you received a refund or a discount from your car insurance company, you may want to hold on to it. At least one company is making customers pay it back if they decide to leave for another insurer.
We told you in April how a lot of insurance companies were refunding customers since roadways were virtually empty in march and April. That meant fewer accidents and claims and a windfall for the insurers.
Geico gave customers 15% off their total policies at renewal. Houstonian Kelsey Lok’s policy expired in July, but she got her refund in June as a $150 credit on her bill.
“The company stated that they were going to give it to me due to COVID-19 as a thank you to their customers and as a ‘We see you, we care about you,’” Lok told consumer expert Amy Davis.
In July, Lok found a better rate with a different insurance company. When she called Geico to let them know she's be switching when her current policy expired, a Geico representative told her she had to repay the refund.
“I kept asking her, ‘Where did I sign a legally binding document stating that if I were to cancel my policy that I have to pay this money back?’ because I was under the impression that it went to my previous policy, not my new policy,” Lok told Davis.
Davis made multiple calls and sent emails to Geico the same yesterday asking the same. No one from the company replied.
When we asked the Texas Department of Insurance if Geico could demand the money back, TDI representative Ben Gonzalez sent an email that read in part, “The Texas Insurance Code gives TDI the authority to order refunds if an insurer has charged a personal auto rate that is excessive or unfairly discriminatory. State law defines an excessive rate as one that is ‘likely to produce a long-term profit that is unreasonably high in relation to the insurance coverage provided.' We’ll be evaluating claims data as it becomes available to ensure rates are not excessive.”