GEICO Corp., one of the largest automobile insurers in Maryland, said three of its auto insurance subsidiaries will give a 25 percent refund to policyholders who are serving in the Desert Shield operation in the Middle East.
The refund will amount to an estimated $1 million, said GEICO, which is based in Chevy Chase.
"While our Desert Shield military policyholders are facing increased personal risk in the Middle East, the risk factors for their cars back at home have gone down," said Edward H. Utley, president of GEICO.
"It costs us less to insure the automobiles of policyholders serving in Desert Shield, and we believe those savings should be passed on to our policyholders," Utley said.
The refund will go to customers of Government Employees Insurance Company, GEICO General and GEICO Indemnity. GEICO's insurance subsidiary for high-risk drivers, Criterion Casualty Co., will not pay a refund because it is not structured to do so.
The refund, which is called a dividend, will apply to the time that the policyholder is in the Middle East. The refund will go to policyholders who have served at least 30 continuous days between Aug. 1 and Dec. 31.
Utley estimates that about 23,000 policyholders nationwide will be eligible for the refund. Letters will be mailed in early February to all the company's military policyholders to establish their eligibility.
The 25 percent dividend is to be based on premiums paid while a policyholder is deployed in Saudi Arabia during the five-month period.
It is to be applied to the policyholder's account balance or, in cases where a person is no longer with the company, a check is to be sent to the policyholder.
GEICO has about 180,000 policyholders in Maryland.