Florida OIR Takes Action Against Unlicensed Auto Insurance Provider
Florida's Insurance Commissioner, Mike Yaworsky, has directed American Dream Auto Protect to cease operations in the state after identifying the sale of service agreements without a proper license. This action is part of a larger initiative by the Office of Insurance Regulation (OIR) to safeguard consumers from the risks associated with unlicensed insurance products.
State officials discovered that American Dream Auto Protect was entering motor vehicle service agreements with residents without the necessary authorization from the OIR. To mitigate impact on current policyholders, the company is mandated to honor existing warranties as per Florida law, permit cancellation of coverage with full refunds, and settle legitimate claims.
To inform and protect consumers, the OIR requires American Dream to notify its customers by providing a copy of the consent order and display the order on its website. This order follows findings of around 900 active contracts and more than $2.2 million in unearned premiums. Efforts by the company to sell its remaining business were unsuccessful, leaving approximately 600 active contracts, 80% of which are expected to expire in the next 18 months.
This incident serves as a caution against unlicensed entities, highlighting the lack of financial reserves or oversight required to ensure claim payments. Yaworsky emphasized the importance of OIR's role in regulating such activities: “The Office of Insurance Regulation takes reports of unlicensed activity seriously. Consumers should feel confident that their coverage purchased is legitimate and regulated.” He warned, “We will continue to take strong action against any company that blatantly disregards state law.”
Chief Financial Officer Blaise Ingoglia reinforced the state's commitment to monitoring industry practices, stressing the importance of trust in the insurance sector: “Floridians have a right to know that when they entrust an insurance company with their money, that the company is acting in good faith.”
In response, the OIR unveiled a website to facilitate consumer awareness about unlicensed activities. An unlicensed insurance entity is defined as any individual or business selling, negotiating, or promoting insurance products, including extended warranties and health plans, without state approval.
Yaworsky is advising Floridians engaged with unlicensed companies to transition to state-approved providers. The OIR recommends consumers use their online tools to confirm a company's legitimacy before engaging in contractual agreements.