The Demise of Bahri? – Court of Appeals Further Limits No-Fault Insurers’ Ability to Invoke Fraud Defense

While Bahnam is an unpublished decision, it represents a concerning trend for insurers in no-fault cases. There is no question that Haydaw and Bahnam have further eroded insurers’ ability to invoke the anti-fraud provisions in insurance policies to combat fraud by its insureds. While the decision has left open the possibility of invoking the anti-fraud provision in cases where there is evidence of fraud in the inception of the policy or prior to litigation, an insurer can no longer rely on an anti√¢‚Ǩ‚Äòfraud provision for material misrepresentations discovered after litigation has been commenced. The result is that insurers will likely have to try these matters in order to obtain a favorable result in fraud cases.

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