A Conditional Contract is enforceable only if which occurs?

• A. The delineated conditions are met.
• B. The contract is signed by both parties.
• C. The policy premium is paid.
• D. The insurer approves the claim in advance.

Answer: (A)

In a conditional contract, the insurer’s obligation to pay a claim is not triggered until the specific conditions laid out in the policy are actually met. Those delineated conditions—such as timely notice of loss, filing proof of loss, and cooperating with the investigation—must be satisfied for the contract to be enforceable on the claim. Without meeting those conditions, the insurer isn’t obligated to pay, even if a loss occurs. While signing by both parties and paying the premium are important parts of creating an insurance agreement in general, they don’t by themselves make the claim payment enforceable—the enforceability hinges on those defined conditions being fulfilled. Pre-approval of the claim by the insurer isn’t a standard requirement; eligibility depends on meeting the policy’s conditions.