What is an insurance rescission in an insurance litigation case?

In California, an insurance rescission is a legal action taken by an insurance company to void or cancel an insurance policy. This action can be taken when the insurance company discovers that the policyholder made untrue or inaccurate statements on their insurance application. This could be something as small as not accurately listing the number of individual family members covered by the insurance policy. In an insurance litigation case, the insurance company seeks to have the policy rescinded on the grounds of false statements by the policyholder. The insurance company must prove that the policyholder made a misrepresentation or omission that substantially affected the risk the company took on by issuing the policy. If the insurance company is successful in proving this, then the policy will be rescinded, and the policyholder will no longer receive any benefits or coverage. The policyholder has the right to file a claim against the insurance company in such a case, seeking damages for wrongful rescission. This claim can be made when the policyholder believes that the statements they made on the application were indeed true and accurate, or when the policyholder can prove that the insurance company could not have reasonably been misled by the information provided on the application. In the event that the policyholder is successful in their lawsuit, they may be awarded damages that would have otherwise been covered by the insurance policy.

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What is an insurance rescission in an insurance litigation case?

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