Few things are more difficult to bear than discovering that an insurance policy has been rescinded. Insurance can provide an essential safety net during an illness or after an accident, and consumers rely on insurance companies to keep their word and honor their policies.
California law allows parties to a contract to issue a rescission on insurance policies, but only under specific circumstances. A Los Angeles insurance rescission lawyer can help anyone who has had their policy rescinded by an insurance company after making a claim to collect compensation. Call an experienced attorney today to schedule a consultation.
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Denial of Insurance Policies in Los Angeles
Often, in order to issue a policy, an insurance company will ask questions of the new customer, relying upon their answers to make a decision concerning whether to issue a policy. When the time comes to make a claim, however, insurance companies may take whatever steps necessary to deny a claim and keep their profit margins high.
This includes denying claims using the excuse that they issued a policy based upon incorrect information. The company then denies both the claim and the fact that the policy was ever valid. This concept, known as rescission, means that the insurance company is arguing that the policy would have never been granted in the first place if they had proper information.
Defining a Rescission
A rescission is a legal concept that allows any person to terminate a contract if they find they entered into the contract because of fraud, omission, or some other form of false information. For example, a health insurer may rescind a recently issued policy if they learn that the applicant misstated their age on the application.
The insurance laws allowing a party to rescind a contract are contained in California Civil Code §1691. This statute states that a party wishing to rescind a contract must give notice of their intent to rescind to the other party. Additionally, the rescinding party must return anything of value that they receive from the other party, including policy premiums. Most important of all, a party that wishes to rescind a contract can only do so promptly after discovering the facts that led to them making this decision.
Recoverable Damages in an Insurance Rescission Lawsuit
The available remedies for people who have their policies rescinded in an untimely or illegal manner are provided in California Civil Code §1692. Here, the law states that a party may bring a suit to recover any money or item owed to them by any party because of the rescission.
When viewed through the lens of an insurance policy rescission, this typically includes the reimbursement of all premiums paid to the insurance company minus any benefits received under the policy. A Los Angeles insurance rescission lawyer can help people determine the value of a potential lawsuit and accurately frame their damages in settlement negotiations.
How a Los Angeles Insurance Rescission Attorney Could Assist
When you suffer a loss and turn to your insurance company for payment, it can be a shock to learn that the insurance company is denying the claim using the excuse that the policy has been rescinded. This denial of coverage can be catastrophic if you are in poor health or have recently suffered property damage.
Not only is this poor business practice, but under California law, it may be illegal depending on the circumstances. While it is possible to rescind an insurance policy, the rescission must be done as soon as the concerning information is discovered. Additionally, the insurance company must return all premiums paid by the customer.
When insurance companies violate either of these requirements, a Los Angeles insurance rescission lawyer can help. An attorney works to hold insurance companies responsible for their actions and to recover the compensation that you deserve.
