What is a potential effect of estoppel in an insurance contract?

Estoppel in the context of an insurance contract usually refers to a legal principle that prevents a party from denying or asserting something contrary to what has already been established as true based on their previous actions or statements. When a party acts in a way that leads another party to rely on those actions or statements, they are "estopped" from later asserting a different position.

In an insurance contract, if the insurer has previously accepted premium payments or acknowledged a claim without contesting certain facts, they may be prevented from denying coverage or asserting that conditions for coverage were breached later on. This serves to protect the reliance interests of the insured, who may have acted based on the insurer’s earlier representations or conduct.

The other options do not accurately reflect the nature of estoppel. Estoppel does not provide a way for a party to simply cancel a contract without consequences, nor does it ensure adherence to original terms or permit changes to policy terms. Instead, it focuses on preventing inconsistencies in what a party can assert based on their prior behavior, thus preserving the fair treatment of the parties involved.