Insurance policies that are offered on a "take it or leave it" basis are known as what type of contracts?

Insurance policies that are offered on a "take it or leave it" basis are known as contracts of adhesion. This terminology reflects the nature of the agreement where one party, typically the insurer, drafts the policy terms unilaterally. The other party, the insured, has little to no ability to negotiate the terms or conditions and must accept the contract as it is presented.

Contracts of adhesion are characterized by this imbalance of power because the insurer creates the document and controls the terms, while the insured's role is primarily to agree to those terms or forgo coverage altogether. This type of contract is prevalent in insurance because it simplifies the process for insurers to offer standardized products, making coverage more accessible to the general public.

In the context of insurance, understanding that these contracts are not open to negotiation helps clarify why there is such a strong emphasis on clarity and disclosure of terms within the policy. Regulatory bodies also often scrutinize contracts of adhesion for fairness and transparency to protect consumers, as they may be at a disadvantage in understanding complex legal language or terms.