P&CMImedium
A Michigan insurer's claims adjuster develops reasonable belief that a homeowners claim is fraudulent. Under MCL 500.4507, what course does the statute authorize?
Report the suspected fraud to DIFS or other authorized agency
BPay the claim in full to avoid bad-faith exposure regardless of the evidence
CRefer the insured to the MCCA for investigation
DWait for the insured to file an SIU complaint first
Why this is the answer
Michigan's insurance fraud chapter (MCL 500.4501-4511) lets an insurer, or an agent it authorizes, notify DIFS or another authorized agency of a suspected fraudulent insurance act and release the supporting claim information (MCL 500.4507(1)-(2)). The statute says 'may', so reporting is the proper course rather than a penalty-backed duty; a report made without malice carries civil immunity under MCL 500.4509.
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