What does the term adhesion refer to in the context of insurance contracts?

In the context of insurance contracts, the term adhesion refers to the characteristic of these contracts being offered by insurers on a "take it or leave it" basis. When a policy is presented to a consumer, the consumer typically has no ability to negotiate the terms or conditions; they must accept the contract as it is or reject it entirely. This lack of bargaining power by the insured leads to the idea of adhesion.

The correct answer reflects this concept, emphasizing that the insurer has the authority to determine the terms of the insurance contract, which are not usually open to negotiation. This process highlights the imbalance of power between the insurer and the insured, as the latter has to adhere to the stipulations set forth by the insurer.

In contrast, flexible terms would involve an ability to negotiate or adjust the details of the policy, which is not characteristic of adhesion. Unilateral modifications imply that one party can change the contract terms after acceptance, which isn't how adhesion works; once signed, the terms remain fixed unless amended by both parties. Standardized provisions suggest that certain terms may be uniform across different consumers, but the key aspect of adhesion is the lack of negotiation rather than the standardization of specific clauses.