What is a defining feature of a personal insurance contract?

A defining feature of a personal insurance contract is that it is specifically tailored to the individual. Personal insurance contracts, such as auto, home, or health insurance, are designed to meet the unique needs and circumstances of an individual policyholder. This means that factors like the individual's age, health condition, property specifics, and personal preferences all play a role in determining the terms, coverage limits, and premiums of the policy.

Unlike commercial insurance, which typically covers businesses and may involve multiple entities, personal insurance focuses exclusively on protecting personal assets and liabilities. Additionally, personal insurance contracts are not standardized for all clients; rather, they are customized to reflect the individual’s specific risks and requirements, making them unique to each policyholder. Standardization is more common in commercial policies, which can be structured across similar types of businesses. Therefore, the individuality and customization inherent in personal insurance contracts are what distinctly define them.