Which description best defines a Personal Contract in insurance?

• A. Policies cover people who own and operate things, such as automobiles.
• B. Policies cover property only.
• C. Policies cover business liability.
• D. Policies cover only life insurance.

Answer: (A)

A personal contract is an insurance agreement made with the individual insured, covering risks that relate to the person or to property the person owns and uses, not a business. The description that fits this is policies that cover people who own and operate things, such as automobiles, because it emphasizes insuring the individual and their own property or activities. The other options point to concepts that are not about personal, non-business risk: property-only can be commercial or personal; business liability is clearly for a business; life insurance is just one personal line and doesn’t capture the broader idea of insuring the person and their own property or activities.