GEICO and Liberty Mutual Insurance companies have agreed with Texas Attorney General John Cornyn to return nearly $600,000 deducted from Texas policyholder claims when damaged auto parts were replaced by newer parts.
Under the settlement, Liberty Mutual agreed to stop the practice of deducting for betterment on its policyholders’ claims and will refund $78,000 to policyholders who had an auto repair claim from Jan. 1, 1997 to the present. GEICO, meanwhile, will pay policyholders an estimated $500,000 in reparations.
Under the agreement, GEICO will refund any depreciation or betterment deducted, plus interest, to Texas GEICO policyholders who made auto repair claims against GEICO from January 1, l996 to the present. The average refund amount, including interest, is estimated to be about $150. In addition to GEICO policies, the settlement also covers Colonial County Mutual Insurance Company policyholders whose policies were reinsured by GEICO.
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