Adhesion Insurance Contract

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Adhesion Insurance Contract

A standard insurance policy that a policyholder buys as a whole. That is, the policyholder has no option to change any section of the contract through negotiation with the insurer. All insurance policies are adhesion insurance contracts. This gives the insurer greater predictability in its possible liabilities. In the event of a lawsuit involving a misinterpretation of such a contract, however, courts have tended to rule in favor of the policyholder because there was no negotiation between the two parties.