General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
An insurance policy is described as a contract of adhesion because:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
An adhesion contract is one drafted entirely by one party — here the insurer — and presented to the other on a take-it-or-leave-it basis, with no real bargaining over terms. Because the insured has no opportunity to negotiate, courts interpret ambiguous policy language against the insurer, the drafter. This doctrine protects consumers in the unequal bargaining relationship inherent to insurance.
Why the other options are wrong
- B) There is no joint drafting; the insured accepts or rejects the insurer's standardized form.
- C) Notarization is not required for a valid insurance policy; delivery and acceptance are what matter.
- D) Automatic renewal describes a policy feature, not the adhesion nature of the contract.
Memory hook
Adhesion = their paper, your signature. Take it or leave it — and ambiguity is read against the writer.