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I Didn\\u2019t Know the Gun Was Loaded, A Lie to Get Insurance Benefits  

Pre-Existing Condition Material to No Fault Claim  No fault insurance plans, like that in Michigan, provide benefits to an  injured person regardless of fault. All the state asks from the injured  party is that he or she is honest in the presentation of the claim.  Misrepresenting material facts in the presentation of a no fault claim  is considered fraud and deprives the person injured of the right to  receive benefits. 

 In Mark Smith v. Michigan Automobile Insurance Placement Facility, a  Michigan Court of Appeals decision, Smith lied to the Placement Facility  when making his claim and tried to avoid losing benefits by claiming he  forgot his previous condition and did not intentionally lie.  Smith visited his doctor, Dr. Mohamed Ayad, twice complaining of  \\u201cchronic\\u201d and \\u201cacute\\u201d back and neck pain. Smith was involved, shortly  thereafter, in an automobile accident that, Smith alleged, injured his  back, neck, and shoulder. Smith then filed an application with the  Michigan Automobile Insurance Placement Facility, for personal  protection insurance (PIP) benefits. In this application, plaintiff  indicated that he did not have any preexisting conditions and did not  seek treatment for such conditions before the accident.  Smith falsely testified that he did see Dr. Ayad before the accident,  but only for general health checkups. Smith\\u2019s medical records from Dr.  Ayad, however, showed that Smith visited Dr. Ayad for \\u201cchronic\\u201d and  \\u201cacute\\u201d back and neck pain.

The insurer claimed that Smith committed fraud when he indicated on his  application that he did not have neck and back issues before the  accident.  Smith, unhappy, sued contending that the insurer unreasonably and  unlawfully neglected to assign an insurer to pay Smith his requested PIP  benefits.  A statement is material if it is reasonably relevant to the insurer\\u2019s  investigation of a claim.