What Does Waiver and Estoppel Mean to You on Your Life, Disability and Health Insurance Claim?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jun 25, 2021

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Occasionally you will read a story on the front page of the newspaper where an insurance company was required to provide coverage (or pay on a claim) when it never intended to do so. This can happen because of the legal doctrine of estoppels and waivers. Whatever the insurance agent represents to you binds the agent, insurance provider and you.

Waiver can be defined as the intentional relinquishment of a known right. Estoppel prevents a person or organization from adopting a position, action, or attitude inconsistent with an earlier position if it would result in an injury to another person. In short, they can’t hit you with a bait and switch. Insurance carriers and brokers have to go through certain processes to inform consumers.

Why Are The Legal Doctrines of Waiver and Estoppel Important to Consumers?

They can work to your advantage when dealing with an insurance company. Application of one or the other doctrine to your specific situation can make the difference between your insurance being cancelled or remaining in force or between your claim being denied or being paid. Unfortunately, many consumers still don’t know their rights. With so many types of estoppel, it can be easy for even a savvy consumer to get confused.

The following examples will give you an idea of how these doctrines are applied to various insurance situations.


There are several types of waiver. Each is often raised in the insurance context.

(1) Express Waivers: These may be oral or written. In either case, they are clear statements that a right is being given up. If your insurance company, for example, notifies you that it has not lapsed your policy for nonpayment of premiums, even though it had the right to do so, it has expressly waived that right.

(2) Implied Waivers: These are not created by words, but rather through the conduct of the waiving party that clearly indicates that a right will not be enforced. For example, if your insurance company accepts a premium from you that is delivered after the expiration of the grace period, it has impliedly waived its right to assert that your policy has lapsed.

(3) Waiver by Silence: This is created when there is a duty to speak. If, for example, your insurance company learns of facts showing that you are no longer disabled but continues to pay you disability benefits, it is possible that a court might hold that the insurance company has created a waiver by silence when the insurance company later attempts to recoup the benefits it erroneously paid.

Another example: if your insurance company receives an incomplete application from you but fails to inquire about the missing information, courts will ordinarily rule that your insurance company has waived its right to deny benefits on the basis of missing information. Similarly, if, when processing a claim from you, your insurance company fails to state all grounds for denial of your claim, courts will usually rule that it has waived those grounds it has not asserted. So, if the grounds it has asserted fail, it is out of luck. It cannot then bring up new grounds for denial.

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Are Types of Estoppels Different than Waivers?

It is often described as a rule of fair play. One court, for example, found that an insurance company was estopped (prevented) from asserting a policy’s cancellation provision against its policyholder when the insurance company had a history of accepting late payments from other policyholders. The court stated that the insurance company had misled its policyholder into thinking that sending late premium payments was acceptable, and it ruled that the insurance benefits were owed. This could be considered a form of estoppel by record. In short, previous judgments were made on certain actions or issues, and they won’t relitigate the same issue.

Similarly, if your insurance company has routinely mailed you a notice when each premium is due and it suddenly stops sending premium notices to you without warning or explanation, your insurance company would likely be estopped from asserting that your policy has lapsed because your premium payment was late. In this case, you were misled into thinking a premium notice would always be sent before the policy would lapse for nonpayment of premium. The insurance company had created a reasonable basis for you to rely on the premium notice.

Estoppels are not always handled with official legal action. They could be small routine issues that are handled with a phone customer service agent when the issue is pointed out. If the plaintiff wants to exercise their legal rights in court, though, it can get expensive for insurers very quickly.

Typically, there is a certain breach of contract, stated or implied. Estoppel also frequently relies on a reasonable time limit. If you feel your rights have been violated with issues related to estoppel, your next move should be contacting an attorney to make sure you have the proper representation.

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