An auto insurance provider, popular among car owners struggling with their credit, has closed several offices and has stopped accepting new applicants in some Florida areas, including Tampa.
Direct General Insurance Agency Inc., which provides coverage in the state under the Florida No-Fault and Cash Register brands, closed nine retail stores this week causing disappointment among policy holders. They closed five offices in Tampa, one in West Palm Beach, another one in Fort Myers, and two in Miami.
A company spokeswoman says it is no longer writing new car policies in those areas. But she assures current policy holders that they will not be dropped and will continue to receive coverage until their policy expires.
The spokeswoman explained that the company has to close offices because of undergoing fraud investigation. She declined to give details but says they are working with criminal investigators because their company has been acquiring extraordinary levels of losses which are probably caused by fraudulent activities.
Customers expressed frustration over the news because they were not notified about the changes.
However, state law does not require an insurer to notify regulators or policy holders unless they complete stop operation or unless they drop 1,000 policies. Closing offices do not require notification, legal experts add.
Althea, a Tampa car owner, reported that she showed up last Friday with her monthly payment only to find out that the doors to Florida No-Fault Insurance Agency were barred. They only found a sign and a phone number taped to the door.
Customers who dial the number hear a recorded message from the other end saying that the insurer is no longer accepting new policies in the area because of present conditions in Florida.
Althea said she really needed an affordable coverage for her car since she is a single parent and makes minimum wage.
The company spokeswoman tells policy holders that the closing is temporary and they intend to resume operation immediately after the case is resolved.
But car owners said there are not too many options left for them who do not have a credit card. They explained that is part of the reason why they chose No-Fault. Drivers who do not have a debit or credit card cannot pay online or through phone so they have to hand-carry their payment to company offices.
Motorists who have been with the company for years said they are worried about what will happen when their policy expires.
The company says it will continue to write policies in areas that are not affected by the changes.