Mich. Insurance Agency Issued Fake Coverage, Regulator Says

Detroit motorists who have purchased auto policies from agency Ethos Insurance may be driving around with fraudulent coverage and should buy legitimate policies as soon as possible, according to Michigan car insurance regulators.

The estimates of how many of the fraudulent policies were actually issued through the agency has been disputed. A spokesman from the state’s Office of Financial and Insurance Regulation (OFIR) places the number at “as many as 1,000,” while Don Diamond, an insurance agent associated with the fraud issue, says that number is more like 200, according to the Detroit Free Press.

OFIR officials said consumers should contact the office if they believe they may have purchased fraudulent policies from Ethos or Diamond. “Right now they’re driving without insurance,” Commissioner Kevin Clinton noted about people who purchased the policies.

The OFIR says the fraudulent policies were said to be providing coverage through legitimate insurers, though this was not the case. The OFIR has listed a cease-and-desist order for Ethos.

Consumers notified the office of their suspicions after Ethos “failed to produce documents related to their auto policy.”

It appears that there was little that could have been done on the consumers’ side. Most regulators recommend that prospective policyholders vet agencies and agents by checking their license status with the department before purchasing coverage. But while this agency was conducting “unlicensed and fraudulent” activity, it still held a valid Michigan license to sell coverage.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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