PSI Ohio Insurance Practice Exam 2025 - Free Ohio Insurance Practice Questions and Study Guide

In the context of insurance contracts, the essential elements are offer, acceptance, and consideration.

The offer is the proposal made by one party (usually the insurer) to provide coverage under specific terms. Acceptance occurs when the other party (the insured) agrees to the terms of the offer, commonly evidenced by signing the policy or paying the initial premium.

Consideration refers to what each party stands to gain from the contract. In insurance, consideration is often represented by the premium that the insured pays in exchange for the insurer's promise to provide coverage. This mutual exchange solidifies the agreement and is a foundational principle in all types of contracts, ensuring that both parties have something of value at stake.

Other options include aspects that may be related to insurance but do not encapsulate the foundational agreement necessary to form a valid contract. Elements like exclusions, premiums, claims, and fiduciary duties are important in the broader context of insurance policies but do not serve as the fundamental building blocks of contract formation.