What defines the agreement between the insurer and the insured?

The agreement between the insurer and the insured is defined as a legal contract. A legal contract is a formal agreement that is enforceable by law and establishes the rights and responsibilities of both parties involved. It typically outlines the terms of coverage, premium payments, conditions, and any exclusions related to the insurance policy.

The creation of a legal contract requires certain elements, including an offer, acceptance, consideration, and the intention to create a legal relationship. In the context of insurance, this contract ensures that both the insurer and the insured have clear expectations and protections.

Other forms of agreement, such as oral agreements, informal understandings, or written guidelines, may not hold the same legal weight or clarity. Oral agreements can often lead to misunderstandings or disputes as they lack documentation, informal understandings may not be binding in a legal sense, and written guidelines may serve more as policy instructions rather than a binding agreement.