What Insurance Regulators Have Said About Package Protection

Key takeaways

• Oklahoma (Nov 2023), Utah (Mar 2024), the NAIC (Jul 2024) and Connecticut (Dec 2024) have published consumer alerts.
• The alerts are warnings, not enforcement actions. None of them names a company.
• Each alert tells shoppers to check who is offering the coverage and whether that seller is licensed.
• Regulators warn that they may not be able to help if an unlicensed seller refuses to pay.
• No state cease-and-desist order, consent order or fine specific to package protection was found as of October 2026.

What did New York say in 2010, and why does it matter?

This opinion is about a different product, so read it as background, not as a ruling on package protection. A company proposed to pay customers if a phylactery (a religious item) was lost or stolen. New York's Office of General Counsel concluded that "An entity that obligates itself to compensate others for the loss or theft of property is not offering a service contract." It reasoned that "Loss or theft of a phylactery constitutes a fortuitous event," which is a key element of New York's definition of insurance.

It is an informal staff opinion. Its logic, that paying for loss or theft is an insurance-type promise, is why it comes up in package protection discussions.

What was said at the NAIC in March 2024?

At the March 18, 2024 meeting of the NAIC Market Regulation and Consumer Affairs (D) Committee, Corinne Carr of Route gave a presentation on shipping insurance. This is an industry participant's argument recorded in the minutes. It is not NAIC guidance.

The minutes record her view that package protection sold through unlicensed apps, or directly by unlicensed merchants, would "fail to comply with state licensing requirements for selling and providing insurance." They also record: "Carr urged the NAIC members to provide guidance that shipping insurance is subject to the same licensing requirements applicable to other forms of insurance." The committee heard the presentation and took no action on it.

A related slide deck, "Package Protection Offerings – Insurance Regulatory Issues," is posted on the NAIC site without an author. It lists several apps' websites under "Websites to Review." It is a presentation, not a finding or an enforcement action.

What did the NAIC say in July 2024?

The NAIC's own consumer alert, "Beware of Package Protection Insurance Scams," warns about unlicensed, unauthorized and potentially fake sellers of package protection coverage.

“Unlicensed entities are not legally allowed to sell insurance products.”— NAIC, Jul 18, 2024, content.naic.org

The alert notes that such sellers "may claim these products are warranties, guarantees, or protection plans." It tells shoppers to check a license through the NAIC's Consumer Insurance Search, to consider a homeowners or renters claim for porch theft, and to review who is offering shipping protection at checkout.

What did Washington's attorney general do in 2026?

This is adjacent, not shipping. On July 31, 2026, the Washington AG announced a settlement with Lexyl Technologies and Bookonline.com over a hotel booking "refund protection" fee added through an "inconspicuous pre-checked box." The AG alleged violations of the Washington Consumer Protection Act and cited the federal Restore Online Shoppers' Confidence Act. Under the settlement, consumers "must opt in" to the service. (atg.wa.gov)

Why it matters to merchants: it shows a state enforcer treating a pre-checked add-on fee as a consumer-protection problem. That is the same checkout pattern at issue in many shipping protection lawsuits.

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