Insurance policy can be classified

An insurance are often classified as a unilateral, a contract. it's ‘unilateral’ therein just one party (the insurer) makes a promise; the opposite party (the insured) makes that promise a binding obligation by playacting associate act, the payment of a premium. In different words, the insured ne'er makes associate enforceable promise to pay the premium; he either pays it or he doesn't. If he doesn't pay it, there are not any legal consequences, however if he will pay, the insurance company has associate obligation to perform. The contract is ‘aleatory’ as a result of the insurance company guarantees solely {to do|to try to to|to try associated do} one thing upon the happening of an unsure or fortuitous event; if the event ne'er takes place, the insurance company doesn't have to be compelled to do something reciprocally for the premium.


For there to be a wrongfully binding insurance contract, the subsequent events should all happen. First, there should be a suggestion, sometimes associate application ready by or on behalf of the potential insured. Second, the provide should be accepted by the insurance company or its representative. For property and casualty policies, a general agent sometimes has authority to simply accept on behalf of the corporate, except for life assurance policies, acceptance takes place solely at the house workplace. Third, the acceptance should be delivered to the provide or, either directly or through a delegated treater. Fourth, and eventually, the insured should pay the primary premium.