What defines an adhesion contract in insurance?

An adhesion contract in insurance is defined by the principle that one party creates the terms and conditions of the contract, which is then accepted or rejected by the other party, without any possibility of negotiation. In the case of insurance, this means that the insurer drafts the contract, and the policyholder has limited ability to alter its provisions. The characteristics of adhesion contracts often lead to the understanding that the insurer holds more power in establishing the terms; therefore, they must be clear and unambiguous to avoid potential disputes.

The other options do not accurately capture the nature of adhesion contracts. For instance, if both parties negotiate the terms equally, it would not be considered an adhesion contract, as the defining feature is the lack of equal bargaining power. Similarly, the policyholder redefining clauses implies mutual agreement and negotiation, which contradicts the concept of adhesion. Lastly, the requirement for notarization does not pertain to the definition of an adhesion contract; such contracts are valid based on agreement and not dependent on notarization.