The law of estoppel is sometimes used in matters relating to insurance. Estoppel is a legal concept that holds an entity to some standards of established behaviour.
Estoppel prevents the insurance company from adopting a position that is not consistent with a position it took previously if it would result in an injury to the insured. Considering that they can be estopped from certain actions, insurers have to be fair in their dealings with the insured.
If you send in a late payment on your insurance premium, the insurance company cannot decide to cancel your insurance if it has been in the habit of accepting late payments from others. This is because you were under the impression that a late payment would not lead to a policy cancellation, based on the insurance company’s behaviour of accepting late payments from others without consequence.
This concept holds an insurance company to some standards in its dealings with consumers. It gives policyholders some assurance that their interests will not be harmed in their dealings with the insurer.