What is the primary consequence of Estoppel in insurance?

The primary consequence of estoppel in insurance is that it plays a crucial role in preventing the denial of a statement that another party has relied upon. In the context of insurance, if an insurer makes a statement or takes a position that leads an insured to believe they can expect certain coverage or benefits, the insurer may be estopped from denying that position later. This doctrine is designed to promote fairness and prevent harm to the party that relied on the initial statement or representation. For instance, if an insurance company suggests that a particular coverage applies in a given situation, and the insured takes action based on that representation, the insurer typically cannot later argue that the coverage does not exist.

The other options provided, while relevant to the insurance field, do not pertain directly to the concept of estoppel. Increased premiums for high-risk clients relate to underwriting practices, reduction in coverage limits deals with policy terms and conditions, and mandatory license renewal procedures concern regulatory compliance. None of these aspects directly addresses the legal implications and protective nature of estoppel in preventing misrepresentations from being denied after they have been relied upon by another party.