CORRECTION 7/22/2014: Although our story published July 16 correctly quotes the lawsuit, the lawsuit misstates the defendant. The correct defendant should have been Direct Auto Insurance Company, 330 S. Wells Street, Suite 910, Chicago, Illinois, 60606.  Direct Auto Insurance Company is not and has never been affiliated with Direct General Insurance Agency of Tennessee, Inc., d/b/a Direct Auto Insurance or any other member of the Direct General Group of Companies.

Direct Auto Insurance Agency issued the following statement:

Direct General Insurance Agency of Tennessee, Inc. and its affiliated insurance agencies, d/b/a Direct Auto Insurance, 1281 Murfreesboro Pike, Nashville, Tennessee, is proud of its reputation and the services it provides to the thousands of customers who rely on Direct Auto Insurance for their auto insurance needs. The company has spent years building its brand and creating awareness of its name, logo and advertising images.

A class-action lawsuit was filed in Cook County Chancery Court naming as the defendant “Direct General Insurance Agency of Tennessee, Inc. d/b/a Direct Auto Insurance Company.”  However, the plaintiff named the wrong party.  The actual defendant should have been Direct Auto Insurance Company, 330 S. Wells Street, Suite 910, Chicago, Illinois 60606.

Direct Auto Insurance Company is not and has never been affiliated with Direct General Insurance Agency of Tennessee, Inc. d/b/a Direct Auto Insurance or any other member of the Direct General Group of Companies. Direct General Insurance Agency of Tennessee, Inc. and its employee agents have never produced business for Direct Auto Insurance Company. The allegations in the lawsuit are not applicable to Direct General Insurance Agency of Tennessee, Inc., its employee agents or affiliates. Accordingly, Direct General has requested that plaintiff’s counsel dismiss Direct General from the lawsuit and believe that they will do so. In the event that does not occur, Direct General will be submitting a filing with the court for the company to be dismissed from the suit.

Regrettably, images of the logo and advertising associated with Direct General Insurance Agency of Tennessee, Inc. d/b/a Direct Auto Insurance have been incorrectly used by certain media outlets to illustrate news stories about the lawsuit without first consulting the company.

“There has been confusion in the past about the two companies with similar names, which translated most recently into this lawsuit that incorrectly names Direct General Insurance Agency of Tennessee, Inc. d/b/a Direct Auto Insurance as a defendant. Many media outlets then began reporting this error using our company’s logo and advertising images. Because we were not provided a chance to address the error prior to its distribution, the company must now insist on corrective action. We are in the process of having our name removed from the lawsuit, and we request that the reported misinformation be corrected as quickly as possible so there is no confusion in the minds of consumers,” said John Arena, Senior Vice President and General Counsel, Direct General Group of Companies.

About Direct Auto Insurance

Direct General Corporation is an insurance holding company and through its subsidiaries, is a leading provider of personal auto insurance, life insurance, and vehicle, and accident protection plans. Direct is headquartered in Nashville, Tennessee, and has more than 400 local offices in 13 states primarily the Southeast with annual revenue of over $450 million. Direct markets and sells its products and services under the Direct Auto Insurance brand through its retail store outlets, by phone through its call center and via the internet.

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The original story:

A class action suit in Chicago's Cook County Court charges that Direct Auto Insurance targets low-income minorities for its "worthless" car insurance policies, profiting from the premiums but refusing to honor claims, Courthouse News Service reports.

"Direct Auto Insurance Company developed a business strategy wherein the company planned to secure customers by offering auto insurance at premiums that were substantially lower than its competitors and market rates," said lead plaintiff Norbert May in her complaint.

"Direct Auto Insurance Company intentionally targeted consumers with low to moderate incomes, including a high percentage of African-American and Hispanic individuals, who did not have the financial ability to hire legal representation to defend them against defendant's predatory practices," May alleged.

The suit charges that Direct Auto's policy of filing meritless declaratory judgment actions on the basis of misrepresentations in policy applications shows that the insurance company never intended to honor any claims on the policies it issued.

May seeks class certification and damages for fraud, breach of contract, and alleged violations of the Illinois insurance code. 

May is represented by Edward McCauley with Kelleher & Buckley in North Barrington, and Daniel Konicek with Konicke & Dillon in Geneva.


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