When Your Health Insurance Policy is Cancelled: Legal and Illegal Rescissions

Post-claims underwriting is a term for an illegal practice in which insurance companies cancel policies after a claim has been filed. Usually, the insurance company will wait until their insured files a large claim, then review their application and look for an excuse to cancel the party and evade payment. Post-claims underwriting occurs when an insurance company looks for an excuse to get out of payment – and can have devastating medical and financial effects for canceled patients.

Companies engage in post-claims underwriting to avoid paying expensive medical bills after a claim is filed. However, this practice is illegal and breaks the good-faith relationship held between an insurance company and their insured. When an insurance company reviews and accepts an application, it is understood that the insured will be covered in case of an injury or illness; rescinding an insurance policy after the fact not only breaks that good faith, but also saddles the now uninsured patient with mammoth medical bills and also uncertain follow-up care.

Insurance companies may deny coverage, but only upon application or upon revelation of intent to deceive. This “willful misrepresentation” or concealment can jeopardize your insurance coverage, so be sure to be honest when filling out insurance paperwork. Grounds for cancellation will be listed in your policy under a section entitled “Cancellation” or “When I Am No Longer Insured.” Post-claims underwriting does not take place when plans are canceled within the terms you agreed to in your insurance policy. However, if you believe your insurance policy was canceled without reason, get in touch with an experienced insurance attorney who can advise you and help bring your case to trial.

Post-claims underwriting can have devastating financial and medical consequences – don’t let it happen to you! If your insurance company informs you that they are canceling your policy, don’t sign any paperwork or cash any premiums checks before speaking with an experienced insurance attorney. Your insurance lawyer can review the allegations of the insurer and file suit if necessary. You may also wish to file a complaint with your state insurance department to alert the authorities, but these claims do not always resolve your situation or provide a financial remedy. Remember, insurance companies have legal departments and lots of experience evading litigation – so don’t go it alone. For a free case review and a referral to an insurance lawyer with post-claims underwriting expertise, click on the “free case review” button at the top of the page.

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