Page 37 - The Insurance Times August 2025

Demystifying Insurance

Unravelling the

Implications of

Estoppel and Waiver

in Claims Settlement

Dr Abhijit K. Chattoraj
Chartered Insurer

The insured later opted for a robotic surgery. However, robotic surgery was not covered under the
policy, and the insurer later denied the claim based on this policy exclusion. The insured or
policyholder can invoke estoppel to prevent the denial of the claim based on the assurance given
by the agent.
I magine a scenario where you have been paying promise to the insured, and the insured relies on that

representation or promise to their detriment. In such cases,
mediclaim premium year after year without any break
the insurer may be estopped from denying the claim, even
in the continuity of the cover, and also without ever
making a claim. You are reminded at the time of each
renewal that, in the event you incur medical expenses if the terms of the insurance policy do not explicitly state
that the loss is covered. For example, if an insurance agent
arising from a disease, the insurance company will honour verbally assures a policyholder (medical insurance) that all
its commitment to pay the medical expenses as covered types of advanced surgeries are covered under their policy,
under the policy. However, last year, a family member of and the policyholder reasonably relies on that assurance.
yours unexpectedly needed hospitalisation, and you
approached the insurance company through your agent to The insured later opted for a robotic surgery. However,
submit the claim. The insurance company denies the claim, robotic surgery was not covered under the policy, and the
leaving you in a state of mental distress and disbelief and of insurer later denied the claim based on this policy exclusion.
course, in great financial misery. Are you aware that a The insured or policyholder can invoke estoppel to prevent
concept called estoppel can sometimes come to your rescue? the denial of the claim based on the assurance given by the
agent. Estoppel works on the principle of reasonable and
Estoppel is a legal principle that protects the interests of legitimate expectation. Suppose a statement or action of
policyholders, preventing insurance companies from an insurer or its agent leads an insured to believe and rely
reneging on their promises. upon it; there can be no going back from that statement or
action, as it has given rise to a legitimate expectation in
1. The Fundamentals of Estoppel the insured.

It is worth noting that estoppel is a powerful legal principle
that allows policyholders to prevent insurers from denying To the contrary, contractual obligations encompass the
claims under certain conditions. The right an insured gets terms and conditions agreed upon by both the insurance
when an insurer or its agents makes a representation or company and the policyholder at the time of policy issuance.

The Insurance Times August 2025 33