Nicole is applying for a health insurance policy. She has a chronic liver ailment and other health problems.
She honestly disclosed the true facts concerning her medical history to the insurance agent. However, the agent did not include all the facts in the application.
Instead, the agent stated that he was going to cover the material facts in a separate letter to the insurance company's underwriting department. However, the agent did not furnish the material facts to the insurer, and the contract was issued as standard. A claim occurred shortly thereafter. After investigating the claim, the insurer denied payment. Nicole contends that the company should pay the claim because she answered honestly all questions that the agent asked.
a. On what basis can the insurance company deny payment of the claim?
b. What legal doctrines can Nicole use to support her argument that the claim should be paid?