Three former policyholders of auto insurer Geico Corp. filed a federal lawsuit on Monday accusing the company of discriminating against blacks by using education and employment status as factors in setting auto insurance rates.
The complaint against Geico, a unit of Warren Buffett’s Berkshire Hathaway Inc., which was filed in U.S. District Court in Minneapolis, claims that the No. 4 U.S. auto insurer “routinely” charges higher auto insurance premiums to blue-collar workers than to doctors and lawyers.
It said that because black policyholders are “significantly less likely” than whites to hold jobs requiring advanced education, Geico knew that using occupation and education levels to set insurance rates would result in blacks being charged more than whites with similar driving records.
The lawsuit, which seeks class-action status, accuses Geico of intentional discrimination against blacks and concealing its practices from policyholders and insurance regulators.