The Government Employees Insurance Company is an American auto insurance company out of Maryland. Today it is the second largest auto insurer in the United States, after State Farm. It is owned by Berkshire Hathaway and insures more than 22 million motor vehicles and has 14 million policyholders.
GEICO was founded in 1936 by Leo Goodwin and his wife, Lillian Goodwin to provide auto insurance directly to federal government employees and their families because he thought they would be a lower risk than the public at large.
Goodwin learned this while working at USAA, which still exists today and writes insurance mainly for military personnel. Based on Goodwin's experience at USAA, GEICO's original business model was predicated on the assumption that federal employees as a group would constitute a less risky and more financially stable pool of insureds, as opposed to the general public. Despite the presence of the word "government" in its name, GEICO has always been a private corporation.
Of course, it is best known for its cheeky television commercials with the Cockney gecko. GEICO is well known in popular culture for its advertising, having made a large number of commercials intended to entertain viewers,
Despite its funny commercials, I can tell you its insurance adjusters are some of the most difficult to work with in the State of Indiana. They consistently undervalue claims made by injured motorists, including almost a complete lack of acknowledgement for pain and suffering or mental anguish as a result of a personal injury.
There is some belief that GEICO follows the Colossus software that assigns a numerical score to each personal injury claimant in order to achieve a standardized amount to offer based upon factors it considers important (pain and suffering and mental anguish, apparently, are not high on the list of this software evaluations).
We have found that we typically file lawsuits against GEICO, rather than settling before a lawsuit is filed (often called "pre-litigation" in our business) at a higher percentage than with other insurers (except State Farm Insurance Company and Allstate Insurance Company).
We've seen offers to settle in "pre-lit" eventually become 20x (twenty times) or more higher once the lawsuit reaches the mediation stage.
That's why it can be to your advantage to listen to your lawyers and file lawsuits when appropriate.