Millions of Americans have already seen the television ad from Travelers Insurance (Stock Quote: TRV) called “Driving Your House” where a man driving his house through the desert loses control of the “vehicle” and sends his lifetime belongings scattered to the four winds.

A voiceover follows, saying, "Without the right auto insurance, a crash might impact more than your car. Make sure you're properly covered, so when you're driving your car, you're not risking your house. Travelers, take the scary out of life." But the Texas Attorney General’s Office says that the ad is deceptive – and that consumers who bite are taking on an unneeded expense.

In early July, the Texas AG’s office sent a “cease and desist” letter to Travelers telling the insurance company to pull the ad.

After some back and forth between the insurance company and the Texas attorney general’s office, on July 8 Travelers agreed to stop airing the ads.

The bone of contention was this: The Texas AG’s office said in its cease and desist letter that Travelers was misleading consumers by “improperly asserting” that Texas homeowners need to purchase additional auto insurance or risk losing their homes in the event of a auto accident.

The letter, signed by Texas AG Greg Abbot, ordered Travelers to pull the ad from all Texas media platforms, including television, radio, print, and the Internet.

"Texans are protected by robust homestead laws that insulate homeowners from the losses depicted in Travelers' advertisements," Abbott said in a statement. "Because the state already protects homeowners, it is improper for Travelers to scare Texans into buying insurance they may not need."

According to the state consumer advocacy group TexasWatch, which originally brought the Travelers ad to the attention of the attorney general’s office, the Texas state constitution is clear-cut when it comes such “misleading” advertisements. “The Texas Constitution (Article 16, Section 50) strictly prohibits the forced sale of a person’s homestead except in narrow circumstances, clearly protecting homeowners from just the type of situation outlined in the Travelers television ad,” the group says in a July 7 letter to Abbot.

“This ad is deceptive and misleading,” said Alex Winslow, Texas Watch’s Executive Director.  “During our nation’s current economic crisis, it is shameful that an insurance company would prey on the fears of families who are already concerned about being able to make their mortgage payments just to sell more overpriced insurance.”

It’s not the first time that Texas Watch got in the face of a national insurer. In 2005, the group called out Allstate (Stock Quote: ALL) on a similar ad – and the insurer, like Travelers, wound up pulling the ad.