What is an insurance rescission in an insurance litigation case?

In insurance litigation cases, an insurance rescission is a legal action taken to void or cancel an insurance policy. This action is taken when it is determined that either the policyholder or the insurer made a material misrepresentation while the policy was being created or when an omission was made. In Oregon, a material misrepresentation is defined as a false statement of a matter that if believed, would have led to the policyholder being denied coverage. Omissions are material if they would have led to a different policy being issued with different coverage or premiums. When rescission of an insurance policy is sought, a court must make a determination as to whether there was a material misrepresentation or omission. If the court determines that there was, then the policy is voided and the policyholder cannot collect on a claim. The insurer is also entitled to a refund of any and all premiums that were paid up to that point. In Oregon, the timeframe in which an insurer has to file for rescission of a policy is typically within two years of the date the policy was issued. In certain situations, however, the insurer can file for rescission outside of this window if they can prove that the material misrepresentation or omission was fraud on the part of the policyholder. If the rescission is successful, any claims that were made prior to the rescission being granted are still valid.

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What is an insurance rescission in an insurance litigation case?

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