Aleatory Clause Samples

Aleatory. An insurance contract is aleatory, which means it is contingent on an uncertain event (a loss). Insureds who pay premiums but have no losses will not receive claim payments under the policy. They will, however, have the peace of mind of knowing they are covered if a loss occurs. On the other hand, insureds who suffer a loss often get a great deal more from the insurance company than they’ve paid in premiums. When we say that insurance contracts are adhesion contracts, we mean that one party has greater power over the other party in drafting the contract. The provisions of the contract are prepared by one party, the insurer. The other party, the insured, does not take part in the preparation of the contract. Although the insured may request special provisions or coverages, it is the insurance company that ultimately draws up and issues the policy. A problem that sometimes arises in insurance contracts is ambiguity, which occurs when the insurer doesn’t make the terms and agreements of the policy perfectly clear. Since an insurance policy is an adhesion contract, the courts usually resolve any ambiguity in policy wording in favor of the insured. When doing so, the courts may rely on the doctrine of reasonable expectations, which states that a policy includes coverages that an average person would reasonably expect it to include, regardless of what the policy actually provides.

Aleatory those where each of the parties has to his account the acquisition of an equivalent of his prestation, but such equivalent, although pecuniarily appreciable, is not yet determined at the moment of the celebration of the contract, since it depends upon the happening of an uncertain event, thus charging the parties with the risk of loss or gain, e.g., insurance. 1. Nominate – those which have their own individualily and are regulated by special provisions of law, e.g., sale, lease;

Aleatory. The insured will likely receive benefits that far exceed the premiums paid to the insurer. Therefore, the insurance policy is a contract of unequal values. For example, with a life insurance policy, the policyowner agrees to pay premiums in exchange for the promise of the insurance company to pay a certain sum upon the death of the insured. The death benefit will be a much larger amount than the premiums paid. The same concept applies to disability and health insurance policies. Let’s see exactly how that would work. ▇▇▇▇ paid $1,600 in premiums each year over a three-year period for a disability income policy. When ▇▇▇▇ became disabled, his policy paid him $3,500 per month for 18 months, until he was able to return to work. In this case, ▇▇▇▇ was paid a total of $63,000 in disability benefits while paying only $4,800 in total premiums. Another example is ▇▇▇▇▇▇▇, who paid $4,800 in premiums for her group health insurance plan over a two year period. Several months ago, she had surgery to remove a tumor in her abdomen. Her group medical coverage paid $32,000 in hospital.