Car insurance in Michigan is complicated. The Michigan no-fault law has an incredible amount of rules. Insurance companies can use these rules to their advantage, and do so by alleging fraud, misrepresentation, or something similar to deny an auto accident claim.
A common telephone call we get in our office goes something like this. A person, like a niece or nephew, was in a serious car accident and sustained injuries. The car owner called his or her insurance company to make a claim. They explain to the auto insurance company they were not in the accident, but a family member or someone else who lived with them was using the car and was injured in the crash. The policyholder turns to the insurance carrier (1) to get the car repaired and (2) for no-fault benefits for the injured person as permitted by the insurance policy.
The insurance adjuster on the other end of the line starts asking questions. How long did that nephew or family member live at the household? Why was he or she driving that car? How often did he or she drive it? Did they have their own set of keys? Why wasn’t this person listed as a member of the household when the car insurance was taken out?
This last question is the most important and can lead to severe consequences. I cannot tell you the number of times an injured person who would normally get access to very important no-fault benefits – such as the payment of medical bills and lost wages – gets turned down by an insurance carrier because they were not listed on the insurance application.
And insurance carriers, from Allstate to State Farm to Progressive are extremely aggressive at denying claims based on this one piece of information. And unfortunately, the law is on their side.
The sale of insurance is basically the sale of risk. An insurance company is selling the chance something bad will occur and it will have to pay out some type of monetary benefit in return for accepting a premium. The amount of risk the insurance company takes out, and therefore the amount of money it will charge for this risk, depends on a number of different factors. One of these factors is who lives in the house where the car insurance is being purchased and who will operate said vehicle. The more people who live in a household, especially of driving age, the higher the risk. The higher the risk, the higher the insurance premium.
As a result, when you purchase Michigan car insurance, it is essential you tell the truth and list every single individual living with you, and/or every person who will operate the motor vehicle you are insuring. If you are purchasing insurance from an agent, make sure they get the list of names. Check over the application yourself and make sure it was complete and accurate. Do not try to beat the system. Include everyone.
Failing to do can allows insurance companies to deny claims and get out of paying benefits. It allows insurance companies to take your hard-earned money for literally no reason.
And insurance carriers can do this because they are insuring a certain risk for a certain price. If that risk was actually different than what was disclosed during the application process, they can ask a judge to void the insurance policy and disqualify all benefits from that policy. And the trial judge, whether in Detroit or Flint or Grand Rapids, will side with the insurance carrier.
This reality brings me to my next point. If somebody new moves into your home, and that person is of driving age, tell your auto insurance carrier! Again, Michigan car insurance companies have a lot of rights and defenses. They can get out of paying otherwise valid claims in a lot of different ways. Don’t make it easy on them.
Tell your agent if a sister or mother or a friend has moved into the residence and is going to use your car. This may change the premium just a little, but there is no point in spending all that money on car insurance if the carrier can simply void the policy when a car or accident occurs.
If you or someone you know was in a car accident here in Michigan, and the auto insurance carrier is causing problems – such as asserting fraud or misrepresentation – give our office a call at 1-800-LEE-FREE (1-800-533-3733). Our staff of Michigan car accident lawyers can answer your questions. The call is free and we don’t ever charge anything until we win your case. That is our guarantee from our firm to you.
