Michigan insurance scam may have left many paying for phony coverage

Fake Insurance CardsMichigan insurance regulators are reporting that hundreds of drivers in Detroit may be victims of a scam. Nearly 1,000 fraudulent insurance policies were issued from a company based in Texas. State regulators have ordered Michigan-based Don Diamond and Ethos insurance to stop fraudulent deals as they continue investigating the situation. The policies in question seem to have originated from either Diamond or Ethos.

Diamond argues that the fake policies come from malicious subcontractors in Detroit. While state regulators suspect that as many as 1,000 people have fallen prey to the scam, Diamond says the actual number is closer to 200. The insurer has assured customers that it will issue refunds if they provide proof that they were scammed.

The issue was first brought to regulator’s attention late last week when drivers purchasing coverage from Ethos Insurance did not receive proper documentation. Regulators are cautioning motorists who purchased policies from Ethos to make sure their coverage is not faulty. Those with scam policies are considered to be driving without insurance.

State regulators continue to investigate, but their findings have been forwarded to Michigan’s Attorney General, Bill Schuette. The Attorney General will review the findings and determine whether legal action will be taken against the issuers of the fake insurance policies.

Diamond is eager to resolve the matter without further incident. “We’ve been in business since 2000 and have never had a problem like this,” he said.

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