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

Question: 1 / 400

What is the term for the legal agreement between an insurer and insured?

Policy

Contract

The legal agreement between an insurer and insured is referred to as a contract because it establishes the terms and conditions under which the insurer agrees to provide coverage and the insured agrees to pay premiums. This agreement outlines the rights and obligations of both parties, including the specifics of coverage, exclusions, limits, and conditions.

A policy is a type of contract that specifies the particulars of the insurance coverage, serving as the document that encapsulates the contractual relationship. Endorsements are amendments or additions to the policy that modify the coverage provided, while liability generally refers to legal obligations for damages or injury. Understanding that the overarching term governing the relationship is "contract" helps clarify the essential framework within which an insurer-insured relationship operates.

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Endorsement

Liability

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