Geico loses battle over insurance priorities

Tamkia Gordon disclosed to Geico that she was planning a move to Mississippi, that she traveled between Michigan and Mississipi frequently, and that she planned to move the registration of her vehicle to Mississippi and "garage" her car there.  On that basis, Geico provided Tamika Gordon with No Fault coverage on her vehicle through a Mississippi policy with an accompanying Michigan no fault certificate.  Gordon incurred two small claims in Michigan involving the car, which Geico paid.  When the policy was renewed, however, in 2007, Geico did not include the Michigan Certification and three days later Gordon was involved in a motor vehicle collision. Geico refused to pay her medical and sought the Court's permission to invalidate her coverage entirerly, claiming that she obtained it under false pretenses.

Gordon and Michigan Head & Spine Institute sued Geico for PIP benefits and the trial court ruled in the plaintiffs' favor.  The Colurt of Appeals unanimously upheld this outcome, finding that Gordon had not made any false representation to Geico.  Her expression of future intent was not false, and Geico had ample information upon which to reasonably suspect that the law required the vehicle to be insured under Michigan law.  The Court pointed to the fact that Gordon provided Geico with a Michigan driver's license and submitted two small insurance claims for Michigan losses during the recent policy coverage period.

Under existing Michigan law, if the insurer has reason to know that a vehicle is being insured subject to Michigan law, the insurer is legally obligated to write Michigan coverage and cannot avoid that obligation by attempting to impose the blame on the insured.