Question

You recently met with your client, Tripp, to discuss his insurance policies. Tripp was reading a book on contracts and wanted to know how his insurance contract related to the material he was reading and to his circumstances. During your conversation, Tripp made several statements to clarify that he understood insurance. Which of the following statements would you have told him was incorrect?

Answer 1

Characteristic of insurance contract

1) It is unilateral where only insurer is making promise

2) An insurance contract is based on the principal of indemnity, where the insured cannot make a profit from a claim on insurance

3) An insurance contract is a contract of adhesion, where the insured accepts the contract as written and is unable to negotiate the terms of the contract]

4) the insurance contract is aleatory, where unequal monetary values are exchanged

Thus Incorrect statement is An insurance contract is unilateral, where both parties agree to a legally enforceable promise.