An insurance policy is a contract of adhesion because:

Why C is correct

A contract of adhesion is prepared by one party, the insurer, and presented to the other party, the insured, who must accept it as written or decline it; there is no negotiation of terms. Because the insured has little bargaining power, courts generally interpret ambiguous policy language against the insurer, which drafted the document. This rule of construction is a major protection for policyholders and a key reason agents should explain coverage clearly at the point of sale. Adhesion explains why standard forms are rarely modified for individual consumers.

Why the other options are wrong

• A) Policy forms are drafted by the insurer or are filed standard forms. They are not jointly negotiated with each individual insured at the point of sale. The insurer or a rating bureau drafts the filed form, and the consumer has no real voice in negotiating its language.
• B) The rule is the opposite: ambiguities are construed in favor of the insured, not against them, because the insurer wrote the contract. Because the insurer wrote the contract, courts resolve ambiguous wording in favor of the insured who had no drafting power.
• D) Oral modifications by an agent generally cannot override the written policy. The written policy states the entire agreement between the parties. The policy is the complete written agreement, and an agent's oral remarks cannot amend the printed contract.

Memory hook

Adhesion = take it or leave it, so courts tip ambiguous words toward the insured who had no pen.