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GEICO closes California insurance offices, lays off hundreds. State is 'monitoring' situation

Randy Diamond, The Sacramento Bee on

Published in Business News

It’s unclear if GEICO is losing money in California and the moves are part of a strategy to reduce business.

“The company’s actions will make it harder for consumers to buy GEICO policies, particularly those who are computer challenged or prefer to meet an agent in person,” said former California Insurance Commissioner Dave Jones in an interview.

Jones, who served as Insurance Commissioner from 2011 to 2019, said the reason GEICO has local offices is for consumers who want to meet their insurance agent in person.

Or GEICO put it this way on their website about the local agents: “Their primary role is to prospect and generate insurance leads and policies that GEICO would otherwise not capture.”

On Thursday, several GEICO customers who attempted to meet with local agents at the GEICO office at 5211 Madison Ave. in Sacramento were turned away.

They were told to call a 800 number.

“We are permanently shut down and can’t write new policies,” said an agent on Thursday to a reporter.

 

The doors to the office were locked and multiple signs were posted on the agency windows, saying it was temporarily closed today. The signs have hung on the windows since last week when policy sales were stopped.

The agent, who opened the door for less than a minute, stated that the closure was permanent and due to corporate decisions by GEICO, not the local agency, which is independently owned.

GEICO hires local agents, according to its website, who must spend between $100,000 and $250,000 to open an office. The agents make their money on commissions and can only sell GEICO products.

The insurer stopped new policy phone sales in California several months ago.

GEICO is part of Berkshire Hathaway, the publicly traded company run by famed investor Warren Buffett.

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©2022 The Sacramento Bee. Visit at sacbee.com. Distributed by Tribune Content Agency, LLC.

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