(Bloomberg) -- Geico, the auto-insurance unit at Warren Buffett’s Berkshire Hathaway Inc., agreed to a settlement with California regulators after its online price quotes misrepresented some coverage as the cheapest option available.
The insurer’s website showed bodily injury liability limits of $100,000 per person and $300,000 per accident as the smallest available for some customers based on their education level, occupation and gender, the California Department of Insurance said Monday in a statement. State law requires carriers to provide a minimum-limits policy of $15,000 and $30,000.
“Consumers are entitled to a fair estimate that does not misrepresent material information and discloses fully what they are getting for their money,” California Insurance Commissioner Dave Jones said in the statement. “Insurers must adhere to the letter of law when developing quotes, whether in person or through an online system.”
Geico agreed to pay $6 million and to stop using education levels and occupations in quoting coverage limits, according to the statement. The insurer could have to pay an additional $6 million if it fails to comply with the agreement, which was reached after the Consumer Federation of California conducted tests on Geico’s website and alleged that it was discriminatory.
The auto insurer didn’t immediately respond to an e-mail seeking comment sent to a general media address.
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