GEICO has closed all 38 agent offices in California that sell policies for homeowners of cars, homes and other lines, and is ending the practice of selling insurance through phone agents in the state.
Three offices in Sacramento, one in Roseville, three in Fresno and one in Modesto were among the offices that closed in the past few days. The shutdowns have laid off more than 35 workers in the Sacramento area and hundreds statewide.
GEICO’s Roseville office only opened in July 2021. GEICO issued a press release at the time saying it would meet the insurance needs of all Placer County residents.
California Deputy Insurance Commissioner Michael Soler said the California Department of Insurance is following GEICO’s actions.
“We are monitoring to make sure consumers are protected,” he said in a statement.
A GEICO spokesperson would not comment on the new changes but said the company would not be leaving California.
“We continue to write policies in California, and remain available through our direct channels to the more than 2.18 million California customers who are currently insured with us,” the company said in an unsigned statement emailed to The Sacramento Bee.
Changes leave options online through a computer or mobile device is the only way to get a GEICO policy in California
GEICO is one of the largest property and casualty insurance companies in California, but Soler said consumers have options. He said more than 130 companies compete for the private passenger car business and more than 70 companies write homeowners insurance.
GEICO’s actions in California come as the company’s authorized Walk-In dealers and phone sales continue to be located in other Western states. GEICO is also announcing on its website a new sales agent in an office in Naples, Florida.
It’s unclear if GEICO is losing money in California, and these moves are part of a strategy to reduce business.
“The company’s actions will make it difficult for consumers to purchase GEICO policies, especially those who are computer-challenged or prefer to meet an agent in person,” former California Insurance Commissioner Dave Jones said in an interview.
Jones, who served as the 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 puts it this way on its website about local dealers: “Their primary role is to seek out clients and insurance policies that GEICO would not otherwise capture.”
On Thursday, several GEICO customers who tried to meet with local agents at the GEICO office at 5211 Madison Ave were turned away. in Sacramento.
They were told to call 800.
“We are permanently closed and cannot write new policies,” an agent told a reporter on Thursday.
The office doors were closed and several banners were hung on the office windows saying that it was temporarily closed today. Banners have been hanging on windows since last week when sales of the policy stopped.
The agent, who opened the door for less than a minute, stated that the closure was permanent and due to the decisions of GEICO, not the local agency, which is independently owned.
GEICO employs local agents, according to its website, who have to spend between $100,000 and $250,000 to open an office. Agents earn their money on commissions and can only sell GEICO products.
The insurance company halted sales of the new policy phones in California several months ago.
GEICO is part of Berkshire Hathaway, the publicly traded company run by famed investor Warren Buffett.
This story was originally published August 1, 2022 5:00 a.m.