Which statement differentiates adhesion contracts from unilateral contracts in insurance?

• A. Adhesion contracts require mutual negotiation.
• B. Unilateral contracts have no promise to pay benefits.
• C. Adhesion contracts are drafted by the insurer and accepted as-is.
• D. Adhesion contracts allow insured to amend terms.

Answer: (C)

Adhesion contracts are standard form agreements drafted by the insurer and presented to the insured on a take-it-or-leave-it basis, to be accepted as-is. This reflects how the terms are created and offered, with little opportunity for the insured to negotiate. In contrast, a unilateral contract centers on one party’s promise, typically involving performance by the other party; the defining feature is the structure of promises rather than the negotiation posture. So the statement that adhesion contracts are drafted by the insurer and accepted as-is correctly captures the essential characteristic that distinguishes adhesion contracts from unilateral contracts in insurance.