Definition - What does Void Contract mean?
A void contract, in the context of insurance, is an insurance contract or policy that does not have legal validity and is thereby unenforceable in court. A contract may be or become void for a number of reasons, depending on the exact circumstances.
Insuranceopedia explains Void Contract
Valid contracts have four key features: offer and acceptance, consideration, competent parties, and legal purpose. A contract missing any one of these essential element is a void contract. For instance, a minor signs an insurance contract. Because minors are not considered legally competent, the contract is void.
In another context, an insurance company may have the right to void a policy due to the policyholder misrepresenting facts on their application, such as falsely claiming to never have gotten a speeding ticket on an auto insurance application.
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