What is estoppel in relation to insurance contracts?

Estoppel in relation to insurance contracts refers to the legal principle that prevents a party from asserting a claim or a right that contradicts what has already been established as fact, typically through their own previous actions or statements. This means if an insurer or an insured has made representations or promises that were relied upon by another party, they cannot later deny those representations.

The correct answer pertains to a waiver of rights without knowledge, illustrating that a party may unintentionally relinquish certain rights if they have acted in a manner that misleads another party to rely on those actions. For instance, if an insurer leads a policyholder to believe a particular coverage is in effect, the insurer may be estopped from denying that coverage even if the policy technically does not include it.

This concept is critical in insurance because it ensures fairness and upholds the integrity of the contract. For example, if an insurer has continuously accepted premiums for a lapse-free policy, they cannot later claim the policy was void due to non-disclosure if the insured was misled or unaware of such a requirement.

The other options do not accurately describe estoppel. While annulling a policy and concealing information relate to actions that can be taken in the context of insurance, they do not encompass the