Which statement about the principle of estoppel is TRUE?

The principle of estoppel is a legal doctrine that prevents a party from arguing something contrary to a claim made or position taken previously, especially if the other party has relied upon that claim or position. In the context of insurance, it can protect insured individuals from later denials of coverage based on the insurer's prior actions or representations.

When an insurer makes certain representations about coverage or accepts premiums without contesting specific facts, insureds may reasonably rely on these actions. If the insurer later attempts to deny coverage or alter the terms based on factors that were not previously disclosed, estoppel can be invoked to argue that the insurer is barred from doing so because the insured relied on the original representation or acceptance of the policy terms. This mechanism helps ensure fairness in the relationships between insurers and insureds, making it an important aspect of insurance law.

The other options do not accurately describe the effects or applications of estoppel in insurance contexts. For instance, estoppel does not guarantee no premium increases, protect against warranty effects, or allow changes in coverage without consent; rather, it focuses on preventing unfair outcomes based on prior conduct or representations.