Office of the Attorney General News Release Archive

Wednesday, March 28, 2001


State settles lawsuits over unlicensed and deceptive insurance practices in Texas

AUSTIN - Texas Attorney General John Cornyn today filed an agreed final judgment and permanent injunction to settle two lawsuits with U-Haul International, U-Haul Co. of Texas, and their insurance company, Republic Western Insurance Company, regarding unlicensed and deceptive insurance practices in Texas. The judgment was filed and approved today in Travis County District Court.

The U-Haul companies named in the two lawsuits involving the State agree to cease and desist from advertising and selling insurance products until properly licensed by the Texas Department of Insurance. U-Haul also agreed to change the way it sells and advertises its insurance and damage waiver products to consumers in Texas.

"Texas consumers have a right to know what they are buying when they purchase insurance," said Attorney General Cornyn. "Furthermore, companies who sell insurance in Texas must follow the agent licensing laws of this state."

U-Haul, through independently-owned dealerships and company-owned retail centers in Texas, rents trucks, trailers and other equipment, primarily for the moving of household and personal effects. U-Haul also rents, through dealers or retail centers, public storage units in Texas. For a period of time, U-Haul sold products to customers in Texas called "Safemove" and "Safetow" which included such coverages as medical, life and cargo insurance and damage waiver. U-Haul also sold a product called "Safestor," an insurance product for the customer's stored goods. U-Haul sold these products through unlicensed employees and dealers throughout Texas.

Cornyn's lawsuit alleged that U-Haul sold these products to U-Haul customers in a misleading and deceptive way which was meant to disguise the limitations of the products, thus violating the Texas Deceptive Trade Practices - Consumer Protection Act and Texas Insurance Code.

The Texas Attorney General and the Texas Department of Insurance had previously obtained a temporary injunction against U-Haul which prohibited the sale of insurance in Texas until U-Haul was properly licensed. U-Haul is permitted to continue to sell damage waiver alone, but has not yet obtained a license to sell insurance in Texas.

Stipulations of the agreement filed today also include but are not limited to:

  • U-Haul will make available to inquiring customers an easy to read brochure that clearly describes all terms, conditions, exclusions, deductibles and limitations of the optional insurance or damage waiver, and deliver such brochure to the customer at or before the time of purchase;
  • U-Haul will not charge customers for insurance or damage waiver unless the customer separately initials each coverage purchased in the rental agreement;
  • U-Haul will not misrepresent the terms of the insurance or damage waiver being sold; and
  • U-Haul will not represent that a customer, regardless of the circumstances of the damage or loss, is responsible in every instance for all damage or loss to the rented equipment or customer's goods.

The judgment also requires U-Haul to pay attorney's fees and investigative expenses.

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Contact: Mark Heckmann, Tom Kelley or Jane Dees Shepperd at (512) 463-2050.
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