As a Geico customer, you're probably used to paying a fairly attractive annual premium in exchange for your auto insurance coverage. Unlike some full-service auto insurance companies, Geico is known for charging below-market rates for its policies. Unlike many bargain-basement auto insurance companies, Geico is also known for providing responsive claims service and dispensing prompt payouts to drivers who deserve them. As such, it's often said to occupy a "sweet spot" niche between discount and full-service providers. In addition, it enjoys excellent customer satisfaction rankings and experiences relatively low turnover rates.
However, Geico has some key drawbacks. While it's an attractive insurer for mature drivers with stellar driving records, it's not an ideal carrier for younger drivers with blemished driving histories. It's known for raising accident-prone drivers' premiums by more than many other insurance companies. As such, it has developed a reputation as a "trap" company that charges new customers low premiums to earn their business and then jacks up its rates at the first sign of trouble.
Unlike full-service providers like Allstate and State Farm, Geico doesn't offer a blanket "accident forgiveness" discount. While it does reserve the right to overlook a single speeding ticket or at-fault accident during a five-year period, its standards for doing so are far stricter than those of its peer companies. Despite this fact, Geico specifically targets young drivers with affordable policies and clever advertising.
If you believe that Geico has unfairly increased the premiums on your policy, you'll need to speak with one of the company's customer service representatives. It's unusual for an insurance company to raise its premiums without cause. In fact, most insurance companies reduce the premiums that they charge their loyal customers over time to increase customer retention rates.
If you're unable to get a straight answer from your representative, you may wish to check with your state's insurance regulator. Most states permit insurance companies to raise their premiums once or twice within a given calendar year. Unless they're made on individual policyholders in response to specific incidents, these increases must be approved by the proper regulatory authorities.
To justify these rate hikes, insurance companies point to a variety of factors. These might include higher general operating costs or an uptick in the number of accidents in a particular state due to unusually bad weather conditions. Fortunately, you can fight back against such an "unfair" rate increase by shopping around for a new insurance provider.