Apr 11, 2024
An angry driver has taken to TikTok to brand car insurance a “scam” after she received a huge increase to her monthly bill — despite not having any accidents.
TikTok user Ayrial (@ayrial.dan) vented her frustration on the video-sharing platform after her car insurance bill with GEICO jumped from $129 to $202 — a whopping $73 (or 56%) monthly increase.
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When she called up GEICO — which is owned by Warren Buffett’s Berkshire Hathaway — she was told the hike was due to her poor performance in the insurer’s DriveEasy program.
This tipped her over the edge, causing Ayrial to declare “car insurance is a scam” and that she is “canceling [her policy] this month.”
Here’s what happened — and why the cost of auto insurance keeps going up.
Bad driving habits
Most drivers who buy car insurance from GEICO are able to participate in DriveEasy, a safe-driving program that rewards or penalizes drivers based on their driving behavior.
Using sensors in your phone, DriveEasy automatically logs your driving behaviors — like how fast and far you drive, how hard you brake and how often you use your phone — and calculates a safe driving score. GEICO then factors your score into your insurance rate (either with a discount or a price hike) upon renewal.
This is supposed to incentivize drivers to practice safe habits on the road — but it can also catch bad drivers, as Ayrial found out. Her problem with that was, as she claimed in her TikTok, she wasn't always the one driving.
To protect herself from a bad driving score, Ayrial said a GEICO customer service rep told her she should have switched her DriveEasy app settings to ‘passenger’ mode every time she got a ride with somebody else.
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“That’s extra work for me. I don’t understand,” she said, adding that she didn’t “read the fine print” on her policy, which explained how the safe-driving app impacts insurance rates.
As such, Ayrial claimed the “huge increase” in her bill from $129 to $202 is uncalled for.
“Give me a base pay and that’s what I pay,” she said. “If I’m not in an accident, it shouldn’t be extra. That’s like when you’re sick, you pay extra for health insurance. I’m not sick!”
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A silver lining
While Ayrial’s car insurance rate increase was allegedly deemed a direct result of her driving score, many other drivers across the country have seen frustrating rate increases in recent years as a result of broader insurance market trends.
There are several factors driving up the cost of car insurance — from an increase in accident claims, litigation and medical costs for insurers to pay out (and price for), to higher repair costs due to inflation in the price of new and used vehicles, car parts and labor.
There is one silver lining to this dark cloud, which is that car prices are moderating after exploding by record amounts during the COVID-19 pandemic.
While auto insurance costs jumped by 22.2% last month from a year earlier, according to the latest Consumer Price Index data, new vehicle prices actually declined 0.1% and used prices dropped 2.2% over the same period.
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Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.
