Mich. Regulators Warn Consumers About Bogus Auto Policies

Regulators are warning consumers that they have identified a man selling auto coverage policies without a license and that anyone who has done business with him may have an invalid policy.

In a cease-and-desist order issued Tuesday, Mervin Graber and Tennessee Christian Motorist Aid were barred from conducting business without the proper license to do so.

According to the order from the state’s Office of Financial and Insurance Regulation (OFIR), Graber “offered, sold and negotiated” auto coverage to Michigan consumers “without the requisite license.”

In a statement, OFIR Commissioner Kevin Clinton urged those who bought the bogus policies from Graber to “purchase legitimate coverage immediately” and contact investigators at 1-877-999-6442 if they haven’t already done so.

“Right now they’re driving without insurance,” he said.

The case is not unique to Michigan regulators, who warned consumers about a similar occurrence late last year.

In November, OFIR issued a statement cautioning Detroit-area motorists that Shaker Uddin Sadeak lacked the license to sell policies but did so anyway through Al Baraka Enterprise in the city’s Southfield neighborhood.

OFIR regulators were tipped to the case when a motorist reported that some documents of coverage contained misspellings and information that contradicted each other. The ensuing investigation revealed more complaints from consumers about Sadeak and Al Baraka. Ultimately, both were ordered to stop business operations in a cease-and-desist order similar to the recent one issued to Graber.

Regulators’ investigation of Graber has concluded and its results have been handed over to law enforcement, according to OFIR.

Consumers Can Conduct Research on Their Own

According to OFIR, state consumers can use regulators’ licensee listings to confirm that their agent and/or insurer is “authorized to write in Michigan.”

A search for valid licensees may not be a surefire way to uncover the legitimacy of your insurer. In May 2011, similar advisories were issued to motorists in Detroit about illegitimate policies from Ethos Insurance.

Michigan regulators said their investigation found that, while the insurer had a valid license to sell coverage, it sold up to 1,000 policies that weren’t from a legitimate insurer.

Online Auto Insurance published a guide last month for consumers outlining the many ways they can research an agent or insurer on their own, including simple web searches and licensee searches provided by many regulatory agencies.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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