Fraudulent Acts in Discovery Can Let Auto Insurer Off Hook

Misrepresentations made during litigation against auto insurers can disqualify a party from obtaining no-fault benefits, the Michigan Supreme Court ruled Tuesday.

State law says a claim is ineligible for payment under the Michigan Assigned Claims Plan—which provides injured people with coverage when there’s no other insurers from which to seek it—if it’s supported by a “fraudulent insurance act.” The state justices said that includes misrepresentations made during discovery for a lawsuit and not just ones made during the process leading up to an insurer’s coverage decision.

The unanimous opinion, authored by Justice Elizabeth M. Welch, hands a win to ...