Recently, the Kitch No-fault Insurance Team received an Opinion from Judge Brian Sullivan rescinding a policy of no-fault auto insurance, absolving the insurer from a $1.2M liability for Personal Injury Protection (PIP) and Uninsured Motorist (UM) coverage based on the named insured misrepresenting facts on her application for insurance.

Plaintiff filed the case seeking PIP and UM benefits under his mother’s auto policy for injuries suffered in a motor vehicle accident. After an investigation revealed that Plaintiff, who had a history of driving offenses and no longer held a Michigan driver’s license, resided with his mother, the named insured, who had misrepresented that she lived alone on her insurance renewal application, the carrier rescinded the policy and remitted a check to the insured for the full renewal premium paid. The insured cashed the check. A Motion for Summary Disposition was filed by Mr. Brady and Rebecca Austin seeking the carrier’s dismissal from the litigation as a result of its rescission of the policy and the insured’s acquiescence to the rescission.

In granting the dismissal, Judge Sullivan utilized the five-prong test set forth in Pioneer State Mut. Ins. Co. v. Wright, 331 Mich. App. 396, 952 N.W.2d 586 (2020) for the balancing of equities and held that, given the availability of other coverage to Plaintiff and Plaintiff’s conduct in causing his injuries, the balancing of the equities favored rescinding the policy.

Misrepresentation on Auto Policy Application Absolves Carrier of $1.2M Liability

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