General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An insurance policy is described as a contract of adhesion. This means that:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A contract of adhesion is drafted by one party, the insurer, and presented to the other, the insured, on a take-it-or-leave-it basis with little or no negotiation. Because of this imbalance, courts construe ambiguous policy language in favor of the insured. Adhesion is one of the defining characteristics of insurance contracts, along with aleatory, unilateral, conditional, and personal characteristics.
Why the other options are wrong
- B) Insurance policies are not individually negotiated; standardized forms are offered as-is, which is precisely what adhesion means.
- C) Renewability is a contract provision; it does not define adhesion, and automatic renewal is not required.
- D) The sequence of performance relates to the contract being conditional, not adhesive.
Memory hook
Adhesion = the fine print is theirs. Ambiguity gets read your way in court.