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Insurance Companies Accusing Drivers of Fraud is a Despicable New Tactic

material misrepresentation

My Car Insurance Company Is Accusing Me of Fraud, What Are They Talking About?

Detroit Car Accident Injury – Insurance Fraud

Getting involved in a Michigan car accident is a traumatic and often life altering event. There are number of different things to take care of after a car crash, from getting the car repaired to your own physical well-being.

In Michigan, when car wrecks occur we turn to our car insurance carrier to help us out. That is why we pay the car insurance premiums to begin with, right? Michigan car insurance companies are responsible for paying what is known as no-fault, or PIP (personal injury protection) benefits. These benefits include the payment of lost wages, the payment of all medical expenses not covered by medical insurance, prescription reimbursement, payment of family members for taking care of an injured person, as well as other benefits.

As you can imagine, Michigan car insurance carriers don’t like paying benefits if they don’t have to. But lately Michigan auto carriers have been taking a new, much more vicious route in getting out of paying claims.

Instead of just denying a Michigan no-fault claim based on an independent medical exam (IME) report or medical review, now carriers are simply alleging fraud on the part of the policyholder (insured) and outright rescinding the insurance policy.

How Can Insurance Companies Do This?

An insurance policy is nothing more than a contract. And a party to a contract – like a car insurance company – can attempt to rescind the contract if they believe there was fraud when the contract was created. When an insurance policy is rescinded, the insurance company acts like it never existed in the first place. The parties go their separate ways. This means the insurance carrier doesn’t pay the benefits the injury victim expects.

Insurance companies like Everest National, Progressive and Titan insurance are claiming fraud and rescinding insurance policies at an alarming rate. The reasons they use are numerous, but they all follow one basic principle. Claiming some material misrepresentation in the insurance application.

When we apply for car insurance, we all complete an insurance application. The application will ask a bunch of questions, such as your address, where the car will be garaged, residents living with you, the ages of these residents, and other information. Insurance companies use this information to in part figure out how much the premiums for the auto insurance will be.

Material Misrepresentation

These are standard questions that have been asked for years. However, now car insurance companies are using this information to claim what is known as a “material misrepresentation”, and then using this alleged misrepresentation to claim fraud to rescind the policy. And trial judges and higher courts in Michigan are letting them get away with it.

Recently, the Michigan Court of Appeals allowed Everest National Insurance to get out of paying no-fault benefits when a gentleman injured in a Macomb County car accident failed to disclose to Everest National that his stepfather, mother and sister were living with him at the time he applied for the insurance. Petrous v. Everest National Ins. Co., docket no. 337310 (unpublished 7/26/2018). Everest claimed if they had known, they would have charged an additional $650 for the insurance premium.

According to Everest, the plaintiff’s failure to disclose this information was fraud, and the Court agreed, dismissing his case. This despite the fact there was no proof the other household members were ever going to drive the car.

Be Wary

So, if you were injured in a Michigan auto accident and are making a claim for no-fault benefits, be aware of this new tactic. The insurance adjuster assigned to your claim will ask you about the car accident, but may also start asking questions that seem to have no bearing on the accident at all.

These questions may include who you are living with at the time of the accident and the address of where you are staying. The insurance adjuster may ask for a recorded statement or a date and time to personally come to the home to meet with you. These types of personal meetings are rare and should send up a red flag that something may be fishy, that the insurance company may be digging for information to use against you at a later time.

Call an Attorney Who Knows the Insurance Company’s Tricks

If this happens, it maybe worth it to contact an attorney to get further guidance. The Lee Steinberg Law Firm, P.C. has been helping Michigan car accident injury victims for decades and we know the no-fault law inside and out. We specialize in insurance fraud cases and can answer your questions.

The phone call is free. In fact, we don’t ever take an attorney fee unless we get you money. For any questions, please contact us at 1-800-LEE-FREE (1-800-533-3733)