An insurance producer meets with a client to complete a life insurance application. The application asks if the client has engaged in hazardous activities, such as scuba diving, within the past two years. The client mentions taking a scuba certification course 18 months ago. The producer says, 'Since it was just a beginner course and over a year ago, we can leave that question blank.' The producer submits the application, and the insurer issues the policy without requesting the missing information. Six months later, the client dies in a scuba diving accident. In a legal dispute over the death benefit, which of the following statements accurately interpret the legal doctrines affecting this contract? (Select all that apply)
- By issuing the policy while accepting an application with a blank question, the insurer created a legal waiver regarding the hazardous activities information.Cevap
- The insurer is legally estopped from denying the death benefit claim based on the scuba diving activity because they previously waived their right to evaluate that risk.Cevap
- CThe producer's decision to leave the question blank legally binds the insurer because producers possess the express authority to alter contract provisions.
- DThe client's omission of the scuba diving activity acts as a breach of warranty, which gives the insurer the right to automatically void the contract.
Cevap
The statements correctly identifying that the insurer created a legal waiver by accepting a blank question, and that the insurer is legally estopped from denying the claim based on the waived right.
The correct statements accurately identify that by accepting an incomplete application and issuing the policy, the insurer voluntarily relinquished its right to that information, establishing a waiver. Because the insurer waived this right at issuance, the legal doctrine of estoppel prevents them from later reasserting the right to deny a death benefit claim.
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Waiver and Estoppel in Insurance Contracts