Florida cracks down on car warranty companies
Extended auto warranties are OK in some cases but should be handled with care
Extended auto warranties are a questionable product under the best of circumstances. First off, they’re not really warranties, they’re treated as insurance in some states and as service contracts in others.
What’s the difference? It’s simple but important: A warranty is a promise included with the product that it will work as advertised. A service contract is an optional, paid plan that covers repairs after the warranty ends.
In Florida, where they’re regarded as insurance, regulators have been cracking down on violators.
Insurance Commissioner Michael Yaworsky this week ordered American Dream Auto Protect Inc. to cease operations because it did not have a license or approval from the state Office of Insurance Regulation.
The company, which incorporated last year, must honor its hundreds of existing warranties for the remainder of their term or allow purchasers to cancel and obtain a refund. American Dream, based in New Jersey, must also send the consent order to consumers and post it on the firm’s website, Yaworsky said in a public notice.
The initial cease-and-desist warning was issued last year, before the warranty company had filed incorporation papers in Florida. The state had received complaints about the company’s operations as early as July 2024. The final consent order was issued Feb. 4 of this year.
The complaint notes that American Dream Auto Protect had 894 contracts in Florida as of last summer, and $2.2 million in premiums. Florida Secretary of State corporation records show the firm’s CEO is Moshe Qubrusi, of Edison, New Jersey.
Yaworsky said he has launched a new website showing firms that the office said have operated without licenses. So far, the site lists six warranty companies.
How to Spot an Extended Warranty Scam
Red flags that should make you walk away immediately:
1. You get a robocall or urgent message
If someone says your warranty is “about to expire” and pressures you to act now, assume it’s a scam. Legitimate companies don’t cold-call with deadlines.
2. They claim to be “from your dealer” or automaker
Many scams rely on fake affiliations. Ask for written proof — and verify independently.
3. No contract upfront
If you can’t review the full contract before paying, don’t buy. Legitimate service contracts provide written terms.
4. Vague “bumper-to-bumper” promises
Real contracts contain detailed exclusions. Overly broad claims are a warning sign.
5. High-pressure tactics
Phrases like “today only” or “last chance pricing” are classic fraud signals.
6. Requests for immediate payment
Especially via wire transfer, prepaid cards, or crypto — all major scam indicators.
7. Poor online footprint
Search the company name plus “complaints” or check FTC and state attorney general databases.
8. They won’t explain cancellations
If refund terms are unclear, assume getting your money back will be difficult.
Quick rule: If you didn’t initiate the contact, don’t buy.