Insurance Policy Reformed After Documentation Lapse: A $240K Lesson in Compliance
Insurance Policy Ruling
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Leave no stone unturned. A recent Michigan case in Macomb County Circuit Court serves as a powerful reminder of how administrative oversights can carry significant legal and financial consequences. If this case study is all too personal for you, be sure to get an aggressive personal injury attorney. Instead of taking representations of insurance companies at face value, find one who understands insurance policies and insurance companies, and one who will work to verify what may be available to you if you are injured.
In Matz v. Farm Bureau (Case No. 24-000364-NI), the court ruled that Farm Bureau failed to obtain required signed DIFS (Department of Insurance and Financial Services) forms at each renewal of the plaintiff’s auto insurance policy. While the insurer provided signed documentation from the original issuance, the court determined that was not sufficient to validate ongoing reductions in coverage. As a result, the policy was judicially reformed to reflect Michigan’s default coverage maximums—$250,000/$500,000—resulting in a $240,000 settlement.
Case Summary in Insurance Claim
Court: Macomb County Circuit Court
Judge: Hon. James Biernat
Case No.: 24-000364-NI
Settlement Amount: $240,000
Farm Bureau argued that initial DIFS forms were adequate to support the lower coverage limits throughout the life of the policy. However, the court held that each renewal required updated, signed forms to validate any continued reduction in coverage. Without them, the insurer’s attempt to limit coverage was legally ineffective.
Legal Impact of Missing Signed Documents
This decision reinforces a crucial compliance principle for the insurance industry: Without properly executed documentation at each renewal, changes in coverage may not be legally enforceable.
Policy reformation in this case led to significantly higher coverage limits—and a substantially increased payout to the injured party.
Key Takeaways for Insurers, Attorneys, and Policyholders
For insurers: Compliance isn't optional. Missing a single form can result in costly policy reformation.
For attorneys: Don’t take representations at face value and verify all coverages and applicable policy limits. Seemingly minor procedural errors can become major leverage in litigation.
For policyholders: Be aware of your documentation—your actual coverage may be broader than what your insurer claims.
If you have been injured, personal injury attorney Jeff Buckman can help you evaluate the merits of your case and its potential value, and fight for the coverage and compensation you deserve. With years of extensive experience working for and defending insurance companies prior to representing injured parties, Jeff knows how to turn paperwork errors into meaningful legal leverage for his clients to secure successful outcomes. Let Jeff review the fine print and fight for your rights.