Michigan Case: Williams v. Farm Bureau Mutual Ins. - Lee Steinberg Law Firm

I'll Be Right There

Request Free Consultation

Williams v. Farm Bureau Mutual Ins. Company

Fraud has become one of the most popular defenses made by car insurance companies to prevent the payment of Michigan no-fault benefits after a car accident. Every car insurance policy contains an antifraud provision.

Typically, the provision will say the entire insurance policy is void if, before or after an accident, a person intentionally misrepresented a material fact, engaged in fraudulent conduct or made false statements about the claim.

Insurance companies such as Progressive, LA Insurance, Nationwide and Allstate have been very successful in using this antifraud provision to get otherwise valid claims for no-fault benefits dismissed.

However, in Williams v. Farm Bureau, the Michigan Court of Appeals greatly curtailed the use of fraud as a defense to PIP claims.

Facts of the Case:

The plaintiff was injured in a car accident in Wayne County and filed a claim for Michigan no-fault PIP benefits with her auto insurance company. The insurance company denied her claim. It then moved to have her entire case dismissed, arguing she violated an antifraud provision in the policy. The insurance company alleged she made false statements after her accident about her employment, the extent of her injuries, and her need for assistance.

The insurance company did not claim the plaintiff committed fraud in the inducement, or when she applied for and purchased the auto insurance policy. Instead, Farm Bureau argued the plaintiff made false statements after she purchased the policy and after the car accident occurred. The trial court granted Farm Bureau’s motion to dismiss her claim for PIP benefits, but the Michigan Court of Appeals reversed.


Relying upon the Michigan Supreme Court ruling in Meemic v. Fortson, 506 Mich 297; 954 N.W.2d 115 (2020), the Michigan Court of Appeals held that benefits mandated by law, such as Michigan PIP benefits, cannot be precluded by an antifraud policy found in an insurance contract. This is because a fraud is not a defense contained within the Michigan No-Fault Act. The Court went on to hold:

The Court unambiguously concluded that antifraud provisions are invalid to the degree they purport to apply to misrepresentations or fault that occur after the policy has been issued (postprocurement fraud) but upheld such provisions as long as they are limited to fraud in the inducement (preprocurement fraud). 

Because fraud is not a statutory defense (it’s a common law defense and is not a defense found in the No-Fault Act), the Court then analyzed whether fraud committed after an auto policy has been purchased survived the adoption of the no-fault system. The Court found it did not. 

The Court then went on to analyze Bahri v. IDS Prop Casualty Ins. Co, 308 Michigan App. 420; 864 N.W.2d 609 (2014) and its holding in light of the more recent Michigan Supreme Court decision of Meemic v. Fortson. The Court severely limited Bahri, again stating that insurance carriers cannot use allegations of fraud made by a claimant to dismiss an entire PIP case if the fraud occurred after the insurance policy was already purchased. This rule applies even if the claimant is the policyholder. 

Result of the Case:

Insurance companies can still allege fraud and attempt to void policies if the misrepresentation occurred during the procurement, or purchase of the policy.

However, once the policy is purchased, a car insurance company cannot assert fraud as a way to deny all coverage to not pay statutorily mandated no-fault benefits, such as the payment of medical bills and lost wages following a car accident.

A car insurance company can still deny claims or parts of claims it believes are fraudulent. And the plaintiff bears the burden of proof in showing the benefits he or she is claiming are related to the auto accident. But this determination is for the fact-finder (the jury), not the court.

For example, in this case Farm Bureau can claim to a jury that the plaintiff, Marilyn Williams, committed fraud when making a claim for PIP benefits following her car accident. And Ms. Williams must prove under the law the benefits she is asking Farm Bureau to pay are permitted. But the trial court cannot dismiss Ms. Williams’s entire case, including intervening plaintiff claims made by her treating medical providers, for fraud allegations that occurred after the policy was purchased.  In addition, the Williams v. Farm Bureau limits the power of Bahri, which had been a powerful weapon utilized by insurance carriers all over Michigan to dismiss entire no-fault claims.