Characteristics of an Insurance Contract

A contract of insurance has the following characteristics:

1. Consensual – perfected by the meeting of the minds of the parties
2. Voluntary – it is not compulsory and the parties may incorporate such terms and conditions as they may deem convenient which will be binding provided they are not against the law or public policy
3. Aleatory – depends upon some contingent event
4. Executed – as to the insured after the payment of the premium
5. Executory – as to the insurer as it is not executed until payment for a loss
6. Conditional – subject to conditions the principal one of which is the happening of the event insured against
7. Personal – each party in the contract have in view the character, credit and conduct of the other