On what basis is an "insurance contract" established?

An insurance contract is established through mutual agreement between the insurer and the insured. This mutual agreement is often formalized in written form, detailing the terms, conditions, rights, and obligations of both parties involved. The agreement encompasses the coverage details, premiums to be paid, and the circumstances under which benefits will be paid out.

This consensual approach is fundamental because it ensures that both the insurer and the insured have a clear understanding of what is being offered and what is expected in return. The mutual consent signifies that both parties willingly enter into the contract, which is a critical aspect of contract law. Without this agreement, there can be no legal binding contract, as both parties must agree on the fundamental terms of the insurance policy for it to be valid.