What Does Adhesion Insurance Contract Mean?
Adhesion Insurance contract is a contract where one party states the provisions of the contract while the other party is not involved in its drafting, but whose participation is in either agreeing with it or declining it. An insurance policy is known as an adhesion contract.
Insuranceopedia Explains Adhesion Insurance Contract
In most contracts, all parties are involved in the wording or the details before they reach an agreement and make it legally binding. In insurance, that is not the case. The standard insurance policy already has its own terms and conditions before it is signed and bought by the insured. The participation of the insurance client is often only about consenting or dissenting (by not buying) with the policy presented to him or her. That explains why an insurance contract is considered as an adhesion contract.
However, there are policies in which the policyholder can make modifications by way of riders. In some automobile insurance policies, the insured can add a provision later on such as adding more risks to be covered or adding more names in the policy.