Key Points in This Article:
- Michigan car insurance carriers are aggressively denying claims and refusing to pay Michigan no-fault benefits by alleging fraud or a material misrepresentation in the purchase of the policy.
- The legal definition of material misrepresentation is the act of intentional hiding or fabrication of a material fact which, if known to the other party, could have terminated, or significantly altered the basis of, a contract, deal, or transaction.
- Tell your insurance company everything when purchasing a policy. Don’t leave anything or anybody out and tell the truth.
You or a loved one gets into a car accident on a road or highway in Michigan. You call your car insurance company to make a claim. Instead of being helpful, they ask you a bunch of questions about your cars, and then start mentioning things like fraud or material misrepresentation because you failed to tell them something about one of the vehicles when you purchased the policy.
What is going on here? Michigan car insurance carriers are getting as aggressive as ever at denying claims and refusing to pay Michigan no-fault benefits by alleging fraud or a material misrepresentation in the purchase of the policy.
Almost every week now, I get multiple telephone calls from individuals who were injured in a car crash but cannot get lost wages or their medical bills paid because the insurance carrier is saying some type of fraud occurred. And based on this fraud, they attempt to void the policy and act as if the insurance never existed.
Unfortunately, a lot of the times this allegation works in getting claims denied and dismissed. Michigan’s courts have sided with insurance carriers in a number of recent decisions, upholding fraud provisions contained within an insurance policy and allowing insurance companies like Progressive, LA Insurance, State Farm and Allstate to get out of paying otherwise valid claims.
Most of the time, the fraud alleged by car insurance carriers includes allegations of some type of material misrepresentation when the insurance application was completed and the insurance policy was purchased.
The reasons the insurance companies give to deny claims because of fraud in the application of an insurance policy are many. They can include:
- Failing to list all family members in the household on the insurance application;
- Failing to list all drivers in the household;
- Failing to tell the insurance company that the vehicle would be used as part of a business (like driving for Uber, Lyft, Door Dash or Shipt);
- Failing to give the correct address of where all the vehicles listed in the insurance application will stay or are garaged.
Repercussions of Recent Court Case
A recent Court of Appeals case highlights the awful repercussions of not telling the insurance company everything when you apply for insurance. In Petrous v. Everest National Ins. Co., (docket no. 337310, unpublished July 26, 2018), the Plaintiff was injured in a car accident in Macomb County. The plaintiff had a car insurance policy with Everest National, and turned to this carrier for the payment of no-fault benefits following the crash.
When purchasing the policy, the plaintiff was the only listed driver on the application, and his listed address was his mother’s home. Everest rescinded the policy with plaintiff, refusing to pay benefits. Everest stated that because plaintiff was living with his mother, stepfather and sister, and had failed to list them on the policy application, he committed material misrepresentation and Everest could void the policy. The Court of Appeals agreed, allowing Everest to escape having to pay any no-fault benefits.
How to Complete Car Insurance Applications
Because of cases like this, it is vital that you tell your insurance company everything when purchasing a policy. Don’t leave anything or anybody out and tell the truth. Make sure you include all individuals living in the household and include all listed drivers. If one of your vehicles will be staying at another home overnight, tell them this.
All of this information must be in the insurance application. If you are buying insurance online or over the telephone, make sure you provide this information, even if you are not asked.
When you have completed the application, ask the customer representative for the insurance company to email you or text you a copy of the application to make sure it is correct. If something is not right, tell them immediately.
In addition, if you move, make sure you tell the insurance company this as well. I can’t tell you the number of otherwise valid claims that get denied here in Michigan because a person failed to tell their car insurance carrier they moved and the car was now garaged at a new address.
By failing to do this, the car insurance carrier will deny your claim and won’t pay to fix your car or pay any no-fault benefits, such as your lost wages and medical expenses.
The dedicated Michigan car accident lawyers at the Lee Steinberg Law Firm, P.C. have been helping motorists all over Michigan for years. If your car insurance company is giving you problems, give us a call. Our team of car crash injury lawyers are standing by, ready to help.
Please call 1-800-LEE-FREE (1-800-533-3733). The call is free and there is no fee unless we win your case.