What is the Definition of Aleatory Contract?
A contract in which one party provides something of value to another party in exchange for a conditional promise, which is a promise that the other party will perform a stated act upon the occurrence of an uncertain event. Insurance contracts are aleatory because the policyowner pays premiums to the insurer, and in return the insurer promises to pay benefits if the event insured against occurs. Contrast with Commutative contract.
Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/
Label: Insurance
Theme: Dictionary of Insurance Terms
Other Questions: What is the definition of Insurance?
What is the Definition of Aleatory Contract?
Check out other definition of insurance terms below:
What is the Meaning of PERSONAL ARTICLES FLOATER In Insurance Terms?
A policy or an addition to a policy used to cover personal valuables, like jewelry or furs.
What is the Meaning of PERSONAL INJURY PROTECTION COVERAGE/PIP In Insurance Terms?
Portion of an auto insurance policy that covers the treatment of injuries to the driver and passengers of the policyholder’s car.
What is the Meaning of PERSONAL LINES In Insurance Terms?
Property/casualty insurance products that are designed for and bought by individuals, including homeowners and automobile policies. (See Commercial lines)
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