Stock photo for illustration purposes only.
A single checkbox lie on your insurance application could cost you everything after an accident. Michigan’s Supreme Court just proved that point, backing Progressive’s decision to completely void a driver’s coverage after discovering she’d fibbed about where she lived and parked her car.
When White Lies Turn Costly
Most drivers don’t realize how thoroughly insurers investigate after major claims. That’s exactly what happened to Janice Sherman, whose July 2021 accident triggered a deep dive into her policy details. Progressive’s investigators uncovered discrepancies between Sherman’s actual living situation and what she’d reported on her application.
The insurance company calculated that honest answers would’ve pushed Sherman’s premiums up by 83% — a substantial increase that explains why some drivers might be tempted to shade the truth. According to industry data, address-related misrepresentations account for roughly 15% of all application fraud cases, as location heavily influences risk calculations.
Make Sure You’re Not Overpaying
Advertiser Disclosure
RoadBuddy is a free resource that helps drivers compare auto insurance options.
We may receive compensation from some insurance companies and partners when you click on links or request a quote through our site. This may affect where offers appear, but it does not influence our reviews, guidance, or editorial decisions.
Our content is researched and written independently to give you clear and unbiased information.
By using RoadBuddy, you acknowledge and accept this disclosure. Learn more.
The High Stakes of Getting Caught
Here’s where things get brutal for dishonest applicants. Progressive didn’t just adjust Sherman’s rates retroactively — they cancelled her entire policy and refused to pay her personal injury protection benefits. The company returned her $1,500 in premiums, essentially treating the policy as if it never existed.
Sherman fought back in court, arguing for a middle-ground solution where Progressive would simply reform her policy with the correct premium. A trial judge initially agreed, ordering Sherman to pay back the refunded premium plus an additional $1,126. But that victory was short-lived.
Supreme Court Draws a Hard Line
The state’s highest court ultimately sided with Progressive, establishing a precedent that could embolden other insurers to take similar hardline stances. The justices emphasized that insurance contracts depend on mutual honesty — when one party lies, the entire agreement becomes invalid.
This ruling matters beyond Michigan. Similar cases are working through courts nationwide as insurers increasingly use sophisticated data analytics to verify application information after claims. The tools available today make catching inconsistencies much easier than even five years ago.
What Drivers Should Do Now
Review your current policy immediately for any outdated information. If you’ve moved, changed jobs, or altered your driving habits since your last renewal, update your insurer proactively. It’s better to face a rate increase than complete coverage denial after an accident.
Always answer application questions literally and completely. Don’t assume minor details won’t matter — parking location, household members, and vehicle usage patterns all factor into risk calculations. When in doubt, call your agent for clarification rather than guessing.
Consider using apps like RoadBuddy to track your actual driving patterns, which can help you answer usage-based insurance questions accurately. Real-time data beats estimates every time.
Shop around if honest answers reveal you’re paying too little with your current carrier. Dramatically underpriced policies often indicate missing risk factors that will eventually surface. It’s better to find appropriate coverage now than face rescission later.
Document all communications with your insurer, especially when updating policy information. Having a paper trail protects you if questions arise about when and how you disclosed changes.
The Michigan ruling sends a clear message: insurance fraud isn’t worth the risk, no matter how small the lie seems at the time.
