Rescission-Returning the Premium
If the insurer, after declaring the policy void, refuses to return the premium on rescission that act will be construed as contrary to the intent of the company in declaring the policy void and the court will usually prevent the insurer from using, as a defense, the fact that the policy was void. In California, and other states, it is not necessary to actually return the premium on rescission but only to offer to return it. Since most insureds will reject the rescission they will not accept the payment. In fact, the act of cashing a return premium check by the insured will confirm the validity of the rescission and the insured will be estopped from later asserting the validity of the policy.
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