If an insured sells his house to another person, the buyer is prohibited from receiving the seller's insurance policy because insurance is a contract of which nature?

• A. Conditions
• B. Adhesion
• C. Indemnity
• D. A personal nature

Answer: (D)

Insurance is a personal contract because it is entered into between a specific insurer and a specific insured, based on that person’s risk and insurable interest. The policy is issued to the named insured, and the rights and obligations under the contract generally do not transfer to a new owner simply because the property changes hands. If the house is sold, the buyer cannot automatically assume the seller’s policy; the insurer typically requires a new policy in the buyer’s name or an endorsement/assignment with consent. This personal nature explains why the buyer isn’t allowed to receive the seller’s policy by default, even though ownership of the house has changed. The other concepts describe aspects of how contracts operate (such as terms and the manner of agreement) or the purpose (indemnity), but they do not address the transferability issue as directly as the personal nature does.