Geico Abruptly Closes Every Single Office Overnight In One State Sparking Recession Fears

OPINION: This article contains commentary which may reflect the author's opinion

A new local GEICO office was opened in January of this year.

The new office is located in Vero Beach, Florida to better serve customers living in the nearby areas of Sebastian, Fort Pierce, Indian River, St. Lucie, and Okeechobee counties.

The company is one of many which have either moved to the Sunshine State or relocated headquarters and production there because of horrible business climates in liberal-run states.

In an unexpected move on Tuesday, Geico shut every single one of its offices in California which is run by a Democrat governor and supermajority Democrat legislature.

“Across California, Geico customers suddenly found their local offices shuttered on Tuesday,” the Western Journal reported.

Doors locked. Lights out. Some were found with a hand-written note on the door stating that the local insurance offices had closed, the San Francisco Chronicle reported.

“I’d be worried about it if they’re closing or if all the insurance are going to close or is a recession coming or what is it?” customer Angelina Barron, who saw such a sign, told KXTV-TV in Sacramento.

The Sacramento Bee reports that 38 branches of the well-known insurer have closed, putting hundreds of employees out of work.

Geico now requires customers to use a computer or mobile device to purchase insurance or manage existing accounts.

As reported by the Chronicle, the firm “is pausing telephone sales of new policies here, although consumers can still sign up online. Existing policies will remain in force.”

“We continue to write policies in California, and we remain available through our direct channels for the more than 2.18 million California customers presently insured with us,” the company told the Bee.

Various outlets have asked Geico for further information, but the company has not responded. Geico has locations and phone agents in other states that are currently operating.

According to the Epoch Times, a company representative said the locally owned and operated branches were informed of the decision “in a two-minute zoom call.”

“‘It’s criminal,’ protested a branch office owner, calling GEICO’s famous reptile ‘heartless’ and ‘cold-blooded.’”

A statement from California’s Department of Insurance to the Sacramento Bee read, “We are monitoring to make sure consumers are protected.”

“California has a strong insurance market with more than 130 companies competing for consumers’ private passenger auto business and more than 70 companies writing homeowners insurance,” it noted. “We encourage consumers to look at their options for coverage in California’s competitive marketplace.”

In his comments to the outlet, former California Insurance Commissioner Dave Jones said, “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.”

Trade publications reported that Geico’s decision to leave California was due to its inability, under Sacramento’s regulation, to raise rates to keep up with inflation.

According to Janet Ruiz, a spokesperson for the Insurance Information Institute, “The Department of Insurance in California has artificially kept rates lower than maybe they should.”

Ruiz argued that, “inflation, supply chain issues, rising reinsurance rates and increased wildfire risk justify higher rates,” said the Chronicle.

“Steve Young, an attorney with Independent Insurance Agents & Brokers of California, made a similar statement to KXTV, saying the state’s regulatory environment has made it harder for insurance companies to do business there,” the Journal added.

“There’s a very complicated insurance rating law that is in effect here, that makes it very difficult for insurers to have confidence that they can get the rate that they need from an actuarial perspective to ride these risks going forward,” he said.

As of Thursday morning, Geico had not posted a news release on its website regarding the California closures.

“A 2021 report by the Hoover Institution at Stanford University in August 2021 found that 74 corporate headquarters left California in just the first six months of the year, in addition to 64 companies that moved out in 2020,” local news station KRON 4 reports.

Bay Area counties accounted for five of the top 10 counties that saw headquarter migration — with San Francisco leading the way.

Some of the biggest names to exit the less-than Golden Democrat-run state are Tesla, Oracle, Hewlett Packard Enterprise, Charles Schwab Corp, and Palantir Technologies.

In comparison, Florida, and Texas, both states run by Republican governors and legislatures, are doing well.

A report from the trade group CompTIA shows Florida added 2,715 tech companies last year, outpacing Texas and California.

The New York Post reported that “Florida had the second-highest number of tech jobs added last year at 10,522 — second to Texas which gained 10,851 positions.”

Much of Florida’s tech growth was concentrated in Miami, which added 2,072 positions in the field last year.

New York — which still ranks third in the number of total tech jobs behind California and Texas — did not make the top 10 in either category, CompTIA found.

It’s not just businesses fleeing Democrat-run states. The population of California shrank by 262,000 residents last year, while the population of New York shrank by 400,000.

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