Rescission requires a misrepresentation or omission in the application that was material to the risk, meaning the insurer would not have issued the policy or would have issued it on different terms had it known the truth.
Premium is typically returned, and coverage is treated as never having attached.
Alternative Names:
Policy Rescission, Voiding the Policy
Why it Matters?
Rescission is the most complete coverage defense available because it eliminates the policy entirely rather than excluding a claim, but the requirements are demanding and courts disfavor forfeiture. Some states require the misrepresentation to have been intentional, and many impose incontestability periods after which rescission is unavailable. Innocent coinsureds may also retain coverage despite another insured's misrepresentation.
Frequently Confused with
Related terms
Frequently asked questions
What must be shown to rescind a policy?
Are innocent coinsureds protected?
