Florida Insurance Law

Florida Insurance Policy Rescission

In United Automobile Insurance Company v. Salgado, 34 Fla. L. Weekly D1578 (Fla. 3DCA 2009), the Florida Third District Court of Appeal held that an insurer was able to rescind a Florida PIP insurance policy for misrepresentation even though the insurer did not cancel the policy with forty-five day's advance notice as required by Florida Statute 627.728(3)(a).  In this case, Salgado was injured in a auto accident and the insurer after investigation of the claim determined that Salgado failed to disclose his brother as a member of his household.  The insurer then sent a notice to Salgado that his insurance policy was cancelled as of the start date of the policy for misrepresentation.  Florida Statute 627.728(3)(a) requires that an insurer provide an insured with written notice of cancellation at least forty-five days in advance of the cancellation date.  Salgado claimed that the insurer's cancellation was improper since the insurer did not give him the required written advance notice and that the State mandated PIP insurance could not be rescinded by an insurer.

In reaching its conclusion that the insurer could rescind the PIP insurance policy for misrepresentation, the Third District held that the Florida No-Fault Law did not abrogate an insurer's right to rescission since the legislature never included that type of insurance in the list of insurance that could not be rescinded.  As to the issue of the insurer's failure to provide forty-five day's advance written notice, the Third District further held that misrepresentation is a viable defense even in the absence of effective cancellation.  In short, misrepresentation trumps all in that it will nullify any policy from its start and is an absolute defense to enforcement of the policy.  In so ruling, the Third District reasoned that rescission has the effect of preventing the insurance policy from ever coming into existence and therefore there is no insurance policy to actually cancel.

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