Agreement

A contract in insurance is an agreement between two or more persons which has an intent to be enforceable at law. This has to be offered and accepted to either do or not do something. This does not always have to be in writing but can be inferred by the behavior of the two persons.

Your insurance policy is an agreement. The insurance company will provide the funds to cover the costs of something going wrong. You give the insurance company money for this assurance of coverage.

If you have any questions in this area be sure to ask your agent or broker.