Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Reviewed by Jeffrey Johnson
Managing Editor & Insurance Lawyer

UPDATED: Jun 19, 2018

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Generally state law and the policy itself provide that the insurer has only 2 years from the date of application to rescind. If discovery of the omission or misrepresentation occurs after the passage of the 2 year period of “contestability” the insurer is generally out of luck and can not cancel the policy. After that, an insurer may only be able to contest a claim on the basis of actual, intentional fraud on the part of the policyholder, and even that may be severely limited.

Because some insurers engaged in “post-claim underwriting“, a practice in which the insurer would write a policy and take the premium, and only after a claim was submitted look to “find a way out of it”, many states have statutes which prohibit “post claims underwriting.” In those states an insurer or plan cannot rescind or cancel a policy once an insured has filed a claim for benefits unless the insurer or plan can prove intentional fraud.