What does the term "contract of adhesion" imply in insurance?

The term "contract of adhesion" refers to a type of agreement where one party, typically the insurer, drafts the terms and conditions and the other party, the insured, has little to no ability to negotiate those terms. This is a common practice in insurance, where policies are often standardized to streamline the process and reduce costs. The key characteristic of a contract of adhesion is the imbalance of power between the parties; the insured must "adhere" to the terms set by the insurer without the opportunity for meaningful negotiation.

In the context of insurance, this means that the insured often agrees to the contract as it is presented, with limited ability to request changes or modifications. The emphasis here is on the unilateral nature of the agreement, which places the burden on the insured to accept the terms as is, reinforcing the idea that the insurer is in a position of greater control in the transaction.