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Forming An Insurance Contract or Policy

Learn about the parties and processes involved in forming an insurance contract, also known as an insurance policy.

Transcript

Forming an insurance contract requires the same basic steps as any contract: an offer, an acceptance, and an exchange of consideration. And, technically, this is all it takes to create insurance. However, insurance contracts are so widespread that specific systems have been developed for their creation. Let’s look at some commonalities in how insurance contracts, often referred to as insurance policies, are formed.

I. Finding an Insurer

Imagine a dentist was opening a new dental clinic. The...