A unilateral contract is one in which

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A unilateral contract is one in which

A) there is an element of chance and potential for unequal exchange of value or consideration for both parties
B) only one party (the insurer) makes any kind of legally enforceable promise
C) the contract has been prepared by one party (the insurance company) with no negotiation between the applicant and the insurer
D) both the policyowner and the insurer must know all material facts and relevant information

Answer: B) only one party (the insurer) makes any kind of legally enforceable promise

Legal Concepts

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? a) $0 b) $30,000 c) $32,000 d) $40,000 Answer: B

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