Arkansas Insurance Adjuster Practice Exam

Which of the following is NOT a characteristic of insurance contracts?

1. Universal

2. Unilateral

3. Conditional

4. Aleatory

The correct answer is: Universal

The other characteristics of insurance contracts include unilateral agreements where only one party, the insurance company, makes a legally binding promise to pay for losses covered under the policy. Insurance contracts are also conditional in that the policy holder must fulfill certain conditions, such as paying premiums and providing accurate information, for coverage to be effective. Finally, insurance contracts are aleatory, meaning that the amount of payment by either party is uncertain and depends on future events. "Universal" is not a characteristic of insurance contracts because it does not accurately describe any aspect of insurance agreements.