Insurance And Deceptive Trade Practices

Let us say you are a guy in Dallas, Fort Worth, Grand Prairie, Arlington, Irving, De Soto, Duncanville, Lancaster, Rowlett, Aledo, or anywhere else in Texas and you see an advertisement. How do you know whether the advertisement is being deceptive or misleading? The answer: You probably don’t know.
Travelers Insurance was recently running an advertisement that was deceptive. There was a story on this on Wednesday, July 7, 2010. The story ran in the Austin paper, American-Statesman and was written by Tim Eaton. The title of the story is, “Consumer group says Travelers ad is deceptive, wants it pulled.”
The Texas consumer advocacy group, Texas Watch, claims a television ad run by Travelers Companys, Inc. is deceptive in its content. The Executive Director of Texas Watch, Alex Winslow, has written to the Texas Attorney General, Greg Abbott, and to the Texas Insurance Commissioner, Mike Geeslin, seeking a cease-and-desist order to keep the ad off the air in Texas.
The article by Eaton tells the reader about the content of the ad saying, “In the advertisement, titled “Driving Your House,” a man is seen driving throught the desert in what appears to be a wall-less house on wheels. The man gets into an accident, which spreads the house’s contents across the desert roadside. As the homeowner-driver flies through the air – along with furniture and a cat – a voiceover says: “Without the right auto insurance, a crash might impact more than your car. Make sure you’re properly covered, so when you’re driving your car, you’re not risking your house.”
Eaton writes that the advertisement ends with the tagline: “Travelers. Take the scary out of life.”
Texas Watch says the message implies that if homeowners don’t carry adequate automobile insurance, then they could lose their homes. But the Texas Constitution has homestead protections that prevent the forced sale of a home in most circumstances. The Texas Watch director, Winslow, says, “What’s particularly troubling about this ad is that it is preying on the fears that many people have about losing their home in our current economic crisis,” and that, “Insurance companies shouldn’t be allowed to deceive their customers into buying more overpriced insurance.”
The Texas Department of Insurance has confirmed receiving the complaint and according to a spokesman, they plan to act quickly.
Both the Texas Department of Insurance and the Texas Attorney General have the authority to demand that a company stop running an advertisement.
As a side note, it is reported in Eaton’s article that in 2005, Attorney General, Greg Abbott issued a cease and desist order to Allstate Corp. after the company ran an ad that featured a family that lost its home and savings because it didn’t carry enough auto insurance. In that case, Allstate was informed that they were in violation of the Texas Deceptive Trade Practices Act and the Texas Insurance Code. Allstate did stop the ad and a lawsuit was not necessary.