Geico shuts all 38 offices in California and lays off hundreds of people
GEICO closes all 38 offices in California and ends insurance sales over the phone, resulting in layoffs of hundreds of employees: State officials ‘monitor’ the situation to ‘ensure customers are protected’
- GEICO is one of the largest insurance companies in the United States
- The company is reportedly closing all 38 agencies in California
- GEICO said the company will still offer policies directly online
- GEICO has not released any reasons why the offices are closed or more are expected
GEICO, one of the largest insurance companies in the United States, has closed all 38 offices in California, resulting in hundreds of layoffs.
California customers hoping to walk into a GEICO office to sign up for a policy are out of luck, the Sacramento Bee reported, as several were rejected this week.
It has also been reported that agencies in the state that sell auto and homeowner policies have ended the practice of selling insurance in person and through telephone agents.
However, the company told the paper that GEICO will still offer policies online, via a computer or mobile device. But buying policies directly through agents over the phone will not be possible.
The reasons for the closures in California are unclear at this time. It is not known if more closures are possible in the United States.
DailyMail.com has contacted the company for more information.
California customers hoping to walk into a GEICO office to sign up for a policy were out of luck this week, as several were turned away this week after 38 offices were closed in the state
The California Department of Insurance is closely monitoring GEICO’s actions.
“We’re monitoring to make sure consumers are protected,” California deputy insurance commissioner Michael Soller told the Sacramento Bee.
A GEICO spokesperson declined to comment on the Sacramento Bee about the new changes, but confirmed the company would not be leaving California.
“We will continue to write policies in California and we will continue to be available through our direct channels to the more than 2.18 million California customers currently insured with us,” GEICO wrote in a statement Monday.
California agent offices that sell auto and homeowner policies have ended the practice of selling insurance in person and through telephone agents
Several GEICO customers were shocked when they tried to meet with local agents at the GEICO office at 5211 Madison Avenue in Sacramento and were turned away. Instead, they were told to call an 800 number.
“We are permanently closed and cannot write new policies,” an agent told a reporter on Thursday.
Local media reported that the office doors were locked and signs were posted on the windows saying it was temporarily closed.
An agent told the Sacramento Bee that the shutdown was permanent and due to business decisions made by GEICO, not the local agency, which is independently owned.
According to the company’s website, GEICO hires local agents who must spend between $100,000 and $250,000 to open an office. The agents then earn their money from commissions and can only sell GEICO products.
GEICO, headquartered in Chevy Chase, Maryland, is one of the largest auto insurance companies in the nation
Offices in Roseville, Fresno and Modesto were among the recently closed properties.
The new GEICO changes mean their only options are online or on a mobile device, but not through a telephone agent.
“The company’s actions will make it harder for consumers to buy GEICO policies, especially for those who have computer problems or prefer to meet an agent in person,” former California Insurance Commissioner Dave Jones told the Sacrament Bee.
GEICO is owned by Berkshire Hathaway, the company of famed investor Warren Buffett.