General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An insurance policy is called a contract of adhesion because it:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
An adhesion contract is one drafted by one party — the insurer — and presented to the other — the applicant — without opportunity to negotiate its terms. This characteristic leads courts to interpret ambiguous policy language in favor of the insured, since the insurer controls the wording. Adhesion is distinct from the aleatory, unilateral, and conditional characteristics, which describe the exchange of values, the promises made, and the conditions of payment.
Why the other options are wrong
- A) Simultaneous performance describes a commutative contract; insurance performance depends on a future uncertain event.
- C) Termination by mutual consent is not the defining feature of adhesion; policies end by lapse, cancellation, or expiration.
- D) The insured cannot rewrite provisions; take-it-or-leave-it drafting is exactly why adhesion protects the insured in interpretation.
Memory hook
Adhesion = sign here, no edits. The insurer wrote the fine print, so ambiguities go to the insured.