#13. What does the application of
"Contract of Adhesion" mean?
a) SINCE THE INSURED DOES NOT PARTICIPATE IN PREPARING THE CONTRACT, ANY AMBIGUITIES WOULD BE RESOLVED IN FAVOR OF THE INSURED.
b) The holder of the contract has the ultimate power of promise.
c) The insurer may go to another for representation.
d) It makes sure that the insured does not get more than the value of the loss.
The insurer prepares the policy and submits it to the insured on a 'take it or leave it basis'. Because the insured does not have input in drafting the policy, but simply adheres to the terms of the policy, the policy is classified as a contract of adhesion. Any uncertain terms in the policy will be interpreted in favor of the insured.