Insurance 101 – Chapter 6 – Volume 25 – Rescission-Returning the Premium

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.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

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The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

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