DETROIT – Families reached out to Local 4 to say their car insurance was abruptly canceled after not listing their toddlers and infants on their policies.
The reality prompted legislators to take action and now Local 4 is working to find out where different insurance providers stand on the issue.
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Tip to Local 4 sparks wider investigation
It all started with a tip via email to Local 4’s Kyla Russell. A Washtenaw County family said their GEICO car insurance was canceled after a Christmas Eve car accident because they did not list their three-month-old and toddler on the household member attestation form.
“We weren’t thinking, like, this is going to completely ruin our financial situation, like it didn’t seem big and the airbags didn’t go off,” mom Kara Vogel said.
Then, more viewers came forward.
“A canceled policy, now, here, ‘You have to pay this amount for your car insurance,’” mom Alexis Razmgar said, looking at a message from GEICO after their policy was canceled. “It’s unbelievable, we’re just in total limbo right now.”
Lawmakers say coverage denials reveal a gap in Michigan law
Legislators said Local 4 was exposing a “gap in the law.”
“I just don’t think what they are doing is right,” said Frances Murphy, an attorney representing a woman who was denied a similar claim for not listing her kids.
Now, Local 4 is getting results.
“Kyla, this bill came out of your reporting, which led to constituents reaching out to our office, saying they did not know that this gap in the law existed,” State Sen. Mallory McMorrow said. McMorrow represents Oakland County and Northwest Detroit and is running for U.S. Senate.
She introduced State Senate Bill 782, which aims to close that gap. The bill is sponsored by two additional state senators.
What Senate Bill 782 would do
The lawmakers are introducing the bill to prevent insurance companies from denying coverage for accidents just because a person in the crash was not listed on an attestation form as a relative in the same home as the person named in the policy.
While consumers say the bill is a step in the right direction if it passes, Local 4 is looking into what drivers in Metro Detroit need to know in the meantime.
After our first story aired in early January, Russell woke up to hundreds of messages from people in the same situation.
Local 4 reported on several of those stories.
One mom was being sued by GEICO for not listing her 12-year-old, who does not drive. Another woman’s car was stolen from her driveway. Her coverage was canceled by CURE Auto Insurance for not listing her college-aged children, who do not live at home but sometimes receive mail at the house.
GEICO told Local 4 they had the rule because state Personal Injury Protections laws require it. But, the Michigan Department of Insurance and Financial Services said it’s up to each individual provider.
“Under state law, insurance companies are permitted to set rates for Personal Injury Protection coverage based on the ‘number of dependents of income earners insured under their policy’ (MCL 500.2111(2)(b)(ii)) and may require consumers to report that information under the terms of their policy,” the department said in a statement. “The consequences to consumers for not disclosing required information can vary, depending on the specific facts of the case.”
Families say uneven enforcement is devastating
Consumers say the varying enforcement has far-reaching impacts.
“It was snowy conditions,” Razmgar said.
It was mid-January. Razmgar, who lives in Commerce, was picking up her daughter from preschool with her toddler in tow.
“He lost control and just rammed right into me as he was turning,” Razmgar said.
Miraculously, the pregnant mom and her children were not hurt, but the bigger battle was still ahead.
Her husband has been a GEICO member for over 25 years.
The couple went to file a claim, but days dragged on, and GEICO said they needed an underwriter to look at it.
Then, her husband noticed something was not right.
“Oh my gosh, our policy was rescinded,” Razmgar said, recalling the moment they checked their coverage. “He said, ‘If you log into the app, it said ‘renew policy.’”
They were canceled for misrepresentation, for not listing their four and two-year-old on the policy.
“No one told us,” Razmgar said. “So, my husband is driving, uninsured, unaware.”
He started calling around for coverage.
There was a problem. Their record now showed they’d been canceled, skyrocketing premium prices at nearly every turn.
“He found a policy, but he’s roughly what he was paying for two cars, we are paying for one,” Razmgar said.
Local 4 has been working for several months to track down where different insurance providers stand on the issue and to alert viewers to a potential problem.
After confirming GEICO is enforcing policyholders to list all members of the household, even toddlers and infants, Local 4 reached out to AAA.
The company’s corporate media line did not answer, so Local 4 called their insurance care line.
“Does AAA require that all household members be listed on car insurance policy, or is it just those of driving age that need to be listed?” Russell asked.
The woman on the other line said Michigan state law required AAA to have customers list everyone, even infants.
Local 4 also recently spoke to the CEO of CURE Auto Insurance. They are also enforcing that all customers list every household member, even infants or elderly household members who do not drive.
“When people fail to disclose who lives in those houses, if we paid those claims, what ends up happening is we pay those claims for all the people that we base our rate on, based on who does live in the house,” CEO Eric Poe said.
Major insurers decline to give clear answers
For weeks, Local 4 called and emailed Progressive, State Farm and Liberty Mutual.
After over five times of reaching out across various avenues, none of the companies gave Local 4 a clear answer on the issue.
Most of them told Local 4 to reach out to the Insurance Alliance of Michigan.
The alliance said providers “may handle individual claims in different ways” and encourages people to read the fine print on their policy.
For those that do not know whether their car insurance provider requires that they list all members of the household, even those who do not drive, should reach out directly to their agent.
Additionally, they should ensure their agent is specifically educated on Michigan personal injury protection law.
Senate Bill 782 is currently in committee, being reviewed.
“DIFS is committed to protecting Michiganders by ensuring that insurers are acting in accordance with state and federal laws and regulations,” DIFS said in a statement. “If consumers have questions or concerns about their insurance policies or wish to file a complaint against an agent or company, contact DIFS at 833-ASK-DIFS, Monday through Friday, 8 a.m. to 5 p.m., or visit Michigan.gov/DIFScomplaints.”