The Michigan Supreme Court has ruled that Progressive can void a policyholder's auto insurance policy over misrepresented garaging and household details.
The unanimous decision, handed down on April 20, 2026, ends a legal battle that wound its way through three levels of Michigan's court system and lands squarely in the middle of an issue every P&C underwriter knows well: what happens when the information on an application turns out to be wrong.
Janice Sherman purchased a no-fault auto insurance policy from Progressive in November 2020, covering a Cadillac and a Chrysler. On her application, she listed Clinton Township as both her home address and the location where she garaged her vehicles. She identified herself as the sole resident and driver. She did not update any of this when she renewed the policy six months later.
Then, in July 2021, Sherman was injured as a passenger in one of the insured vehicles when a hit-and-run driver rear-ended the car. She filed a claim with Progressive for personal protection insurance benefits.
What Progressive found during its investigation changed everything. Sherman did not actually garage her cars in Clinton Township. They were kept at an address in Detroit. She was also living at the Detroit address with her adult son at the time of the accident, and one of her vehicles was garaged at her brother's home. None of this appeared on her application.
Sherman, for her part, said her Detroit home had been uninhabitable due to flooding around the time she applied and that she had been staying with her daughter in Clinton Township. She maintained she never intended to defraud anyone and had worked with an insurance agent who filled out the application.
Regardless, the numbers told a stark story. Progressive's underwriting specialist calculated that accurate information would have increased Sherman's premium by 83.2 percent. Progressive denied the claim, rescinded the policy from inception, and refunded the $1,491.54 Sherman had paid in premiums.
Sherman sued, alleging Progressive had unlawfully refused to pay her benefits and breached the contract. Progressive moved for summary disposition, arguing the policy was void. The trial court sided with Sherman, denying Progressive's motion and instead ordering the policy reformed – essentially rewriting it to reflect a Detroit address and requiring Sherman to repay her refunded premiums plus an additional premium increase, a total of $2,617.65.
The Court of Appeals reversed that decision unanimously, finding the trial court had erred by ordering reformation in a case where the policyholder – not the insurer – had engaged in misconduct. Sherman challenged the standard of review, and the appellate court vacated its initial opinion, issued a new one clarifying its reasoning, and reached the same conclusion.
At the Supreme Court, the six participating justices – Justice Noah P. Hood did not participate because he had sat on the appellate panel – agreed with the Court of Appeals. Justice Brian K. Zahra wrote the opinion.
The court made two things clear. First, it established that appellate courts reviewing a trial court's rescission decision must apply an abuse-of-discretion standard, not the de novo review typically used for equitable relief. This resolved a point of confusion in Michigan's lower courts that had lingered since an earlier appellate decision incorrectly applied a clear error standard in a similar procedural context.
Second, the court found that the trial court had abused its discretion. The equities, in the court's view, ran in only one direction. Sherman made material misrepresentations. Progressive relied on them. Progressive committed no wrongdoing. There were no third-party interests at play. Under those circumstances, the court found no plausible basis for a result that favored Sherman over Progressive.
The court also turned down Sherman's request to send the case back to the trial court for another look at the equities, distinguishing this case from prior decisions where remand had been appropriate because the lower court had never conducted a rescission analysis at all.
For insurers, the decision reinforces that rescission remains available when an applicant provides materially inaccurate information - regardless of whether the misrepresentation was intentional. What matters, under Michigan law, is that the insurer relied on the information and that it was material to the terms of the contract. At the same time, the court was careful to note that rescission is not automatic. Courts are still required to weigh the equities, and in cases where the insurer's own conduct is in question, the outcome could look very different.
