Estoppel

What Does Estoppel Mean?

Estoppel refers to the legal principle that prevents someone from making a claim that contradicts a previous one. The initial claim must have been made earlier by the court or agreed upon by the parties in a court case. This principle is designed to prevent harassment and abuse in the legal process.

Insuranceopedia Explains Estoppel

If estoppel arises from inconsistency, it can be avoided by maintaining consistency. For example, a person cannot claim to be the father of a child and then later refuse to pay child support.

The same principle applies to insurance and estoppel. An insurance company cannot accept late payments and later cancel the policy for the same reason. Similarly, it cannot accept late payments from some policyholders while refusing them from others. Such actions could prompt the court to invoke the principle of estoppel, putting the insurance company in a negative light.