Is GEICO a Fair Insurance Company to Get A Setlemement From?
GEICO is one of the largest auto accident insurance companies in the land, and the largest in Maryland. GEICO is massively profitable. If you have any doubt about that, consider these two salient facts.
- Warren Buffet bought the company, and
- they spend almost a billion dollars a year on advertising.
GEICO had a billion dollars of profit in 2010. [according to CNNMoney]. It has been suggested that the insurance industry, generally, might be happy to "break even" on underwriting [ pay out as much in claims as it takes in in premiums].1, and be content to earn interest, and huge profits, by investing all of those premium dollars. Many insurance insiders will tell you that many top insurers lose money every year in underwriting, and are still financial engines because of their investment strategy. Not so with GEICO which has posted an underwriting profit for 16 out of 17 reported years,2 in addition to its investment income. Consider this:
"Geico’s underwriting profit 'plummeted' to $460 million last year from 2014’s $1.16 billion" 3
Historically, GEICO makes money by denying claims and collecting more in premiums than it pays out in claims. GEICO often denies claims on the basis that there is not a lot of property damage, taking the position that if the car is not damaged, the occupants cannot be hurt. GEICO employs a cadre of some of most highly regarded personal injury attorneys in Maryland to advance these types of arguments in court. They are very adept at doing so, and the persuasive effect of their arguments has swayed countless finders of fact.
-This Article was updated by Eric Kirk on 11/25/19.
I litigate a lot of cases with GEICO. If you have a claim that has been denied or discounted because of an adjuster's inability to understand your injuries in light of the minor property damage to your vehicle -Contact Me. I can help. 410 591 2835.
FN 1 http://www.fool.com/investing/general/2015/12/13/3-charts-that-show-why-warren-buffet-loves-geico.aspx