Rescission: The 'Gotcha' of Insurance Coverage
You thought you had insurance, then when you needed it, the insurance company not only says "no", but actually takes the position that your coverage was never in force due to allegations that you made misrepresentation with respect to your application. They call it rescission — taking back the coverage you thought you had and refunding your premiums. And not paying your claim.
Contact Stephen C. Ryan, Insurance Bad Faith Lawyer · 623-551-3813
In all his years of working for insurance companies and then representing individuals against insurance companies, attorney Stephen Ryan has seen many excuses for rescission or what is often referred to as post-claim underwriting. In nearly every case, the policyholder is blamed for an alleged mistake made on the original application.
Rescission is the insurance company's way of saying "gotcha." They pore through the fine print looking for a reason to deny your claim. In fact, the application process itself is complicated and encourages mistakes — and a reason for rescission. If you have questions, contact the Stephen C. Ryan law firm in Phoenix, Arizona.
The insurance company has two years to contest your coverage.
If an insurance company has challenged your right to coverage, contact a lawyer who is thoroughly experienced with rescission issues. The company has two years to contest the accuracy of the statements made in your application, but they still have to have a good reason to deny your claim and rescind the policy. Specifically, the insurance company has to prove it would not have issued the policy at all, or would have issued it subject to certain restrictions or exclusions, before any denial of benefits or rescission can occur If the insurance company can't prove this, the policy can't be rescinded.
One common scenario is for a health insurance company to interview applicants over the phone. The applicant is asked general and non-specific health question and is told "you're accepted" based upon the answers given to those general questions. When the already "accepted" insured gets the policy in the mail a short time later, attached to the back of the policy is a whole series of much more specific health questions that were never asked of the applicant, but which have been filled out by the insurance company with "yes" and "no" answers. Even assuming the insured takes the time to find and identify these different health questions attached to the back of the policy, the insured naturally assumes the questions are the same questions the insured already answered in the original phone interview. But then when the insured's claim for benefits is submitted down the road, the application's "honesty" is then judged by the very detailed questions that were never asked of the insured, not the general questions asked in the initial phone interview. Judging the accuracy of the application by these very detailed questions, questions referencing countless medical conditions that the insured was never questioned about, makes it very easy for the insurance company to say "Gotcha", you failed to disclose something, or you failed to recall every medical condition you'd ever had, etc. This scenario then leads to the insurance company rescinding the policy, leaving the insured without coverage for what may be a serious medical condition. In fact, insurance companies don't usually even conduct a "post-claims" review as to the accuracy of the insured's application unless the claim causing the investigation is one of catastrophic consequences for the insured.
Know your insurance rights. Contact a lawyer experienced with insurance bad faith. Free consultation.
