Some defintions

·       Bilateral Contract: Both the insurer and the insured have obligations outlined in the contract.

·       Aleatory Contract: The outcome of the contract is uncertain, as the insurer's payment depends on the occurrence of a specific event.

·       Consensual Contract: The contract is formed based on the mutual agreement of both parties.

·       Temporal Contract: The contract covers a specific period of time, and the obligations of the parties are tied to this time frame.

·       Contract of Adhesion: The insured generally accepts the terms set by the insurer, with limited negotiation.

·       Contract of Utmost Good Faith: Both parties must disclose all relevant information truthfully.

·       Commutative Contract: There is an exchange of value between the parties, with the insured paying premiums and the insurer providing coverage.

·       Conditional Contract: The insurer's obligation to pay is conditional upon the occurrence of the insured event.

In essence, an insurance contract is a legally binding agreement between an insurer and an insured, where the insurer agrees to provide financial protection against potential losses in exchange for periodic payments (premiums). The contract is characterized by uncertainty, as the insurer's obligation to pay depends on the occurrence of a specific event.                                                                                             

Some definitions:

·       Risk Transfer: Insurance is essentially a mechanism for transferring risk from the individual to the insurer;

·       Indemnity Principle: The insurer's payment is typically limited to the actual loss suffered by the insured;

·       Subrogation: In some cases, the insurer can step into the shoes of the insured to recover losses from a third party.