insurance note from CE class

Statute law梥ometimes referred to as legislative law梚s that law established by a legislative body.

United States law derives principally from two sources: common law and statute law. Common law is the law that developed out of customs and usage and from the decisions and opinions of the courts

reciprocal associations桾hese associations are also referred to as inter-insurance exchanges. Members of reciprocal exchanges were assessed if losses of other members were higher than anticipated

fraternal societies桾hese organizations are also referred to as mutual benefit societies.

Aleatory
Most contracts are commutative, which means that each party to the contract expects to receive from the other party something that is of equal value to what he or she is giving. For example, if one party to the contract agrees to pay $1,000, he or she expects to receive some benefit approximately equal to $1,000. In such a contract, both parties anticipate a relatively even exchange of value. This is not the case in an insurance policy.

Common Characteristics of Insurance Contracts
The common characteristics of insurance contracts, regardless of the type of insurance involved, are that they are
aleatory,
unilateral,
conditional, and
contracts of adhesion.

Aleatory contract—A contract under which performance is conditioned on the occurrence of an uncertain event.

Contract of adhesion—a contract that is drafted by one party and is offered on a take-it-or-leave-it basis, with little opportunity for the other party to bargain terms, price or other elements.