In insurance, what is a contract (policy) primarily described as?

In the context of insurance, a contract or policy is primarily described as an agreement between the insured and the insurer. This agreement outlines the obligations and rights of each party involved—specifically, the promises made by the insurer to provide coverage for certain risks in exchange for premium payments from the insured. This relationship is foundational in insurance, as it establishes the basis for coverage, the responsibilities of the parties, and the terms under which claims can be made.

The essence of this agreement is not only the legal validation of coverage but also the mutual understanding and acceptance of the terms outlined in the policy. It stipulates what is covered, the exclusions, the claims process, and limits of liability, effectively guiding the behavior and expectations of both parties throughout the insurance term. This contractual relationship is essential, as it serves to protect both the insurer and the insured, ensuring that coverage is available when needed.