How is a contract of adhesion characterized in insurance terms?

A contract of adhesion in the context of insurance is characterized by being drafted by one party, typically the insurer, with the other party, the insured, having little to no opportunity to negotiate the terms. This type of contract is offered on a "take it or leave it" basis, meaning that the insured must either accept the provisions as they are written or forgo coverage altogether.

This characteristic is significant because it highlights the imbalance of power between the insurer and the insured. Since the terms are not subject to negotiation, any ambiguities in the contract are usually interpreted in favor of the insured, a principle known as “contra proferentem.” This serves to protect consumers who may not be as knowledgeable about insurance language or jargon.

The other options describe characteristics that do not accurately reflect the nature of a contract of adhesion, such as negotiating terms or allowing for adjustments, which are not applicable to this type of agreement. Thus, the defining feature of being written by the insurer and adhered to by the insured encapsulates the essence of a contract of adhesion in insurance.