Oklahoma insurance law attorneys agree there are a number of reasons why a policy may be voided by an insurance company.  Fraud by the applicant or policy holder is the most common reason an insurance company would rescind or void an insurance policy.  Rescission is defined as:

1. A party’s unilateral unmaking of a contract for a legally sufficient reason, such as the other party’s material breach, or a judgment rescinding the contract; voidance.  Rescission is generally available as a remedy or defense for a nondefaulting party and is accompanied by restitution of any partial performance, thus restoring the parties to their precontractual positions. — Also termed avoidance.  Black’s Law Dictionary (8th ed. 2004)

According to Oklahoma statute 15 O.S. § 235, a party seeking to rescind or void a contract (which includes an insurance policy) must:

  • act promptly upon discovering facts which entitled him to do so
  • restore to the other party everything of value

In other words, experienced Oklahoma insurance attorneys advise their insurance company clients wanting to rescind a policy on the grounds of fraud to act quickly and also to return all premiums paidSneed v. State ex rel. Department of Transportation, 1983 OK 69, 683 P.2d 525 and Berlands’s Inc., of Tulsa v. Northside Village Shopping Center, 1972 OK 152, 506 P.2d 908.

As a caveat fancy legal wording for caution or warning), accusing a policyholder of fraud needs to be done carefully.  In Oklahoma, an insurer really should consult with competent legal counsel before doing so.