It’s startling that a top insurer is closing its office statewide in California, according to an insurance lawyer.
“It doesn't bode well for insurance as a whole for the state,” said D.E. Robinson, a Los Angeles attorney who specializes in insurance law. “It’s too bad that California is not more friendly to business and, in this case, the insurance business.”
Robinson was reacting to the news that GEICO is closing 38 of its offices statewide and will only sell policies over the internet and no longer on the telephone or in person.
“It will have bad ramifications for insurance and certainly for the state of California because Californians will be deprived of all the opportunities that they should have available to them for the purpose of purchasing insurance,” Robinson told the Southern California Record.
More than 2.18 million Californians are insured with GEICO, according to GEICO.
Although there will no longer be in-person offices, a GEICO spokesperson told the Los Angeles Times and the Sacramento Bee that the insurer would still sell auto and homeowners’ policies to Californians, according to media reports.
“I would think overall storefront offices are important but becoming less important because of the fact that we have so much business done over the internet,” Robinson added. “They believe that they'll be able to make financial gains that way and they probably will be able to save money while saving themselves expenses. What else could possibly be their reason other than financial gain?”
As previously reported in the Southern California Record, Tesla CEO Elon Musk relocated Tesla’s headquarters in Austin, Texas from the Bay area last year while Twitter announced similar plans to downsize last week. Human Resources Director reported that the social media company will vacate an office on Tenth Street in San Francisco and had canceled plans to open an office in Oakland.