An insured pays a $900 annual premium and suffers a $300,000 fire loss in the first month of the policy. The fact that the value exchanged is unequal and depends on chance makes the insurance contract:
a.Unilateral
b.Bilateral
c.Aleatory
d.Conditional
Explanation
An aleatory contract is one in which the values exchanged are unequal and depend on a chance event. The insured may pay a small premium and collect a very large sum, or pay premium for years and collect nothing. Unilateral, conditional, and bilateral describe different features of the contract.
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