Which description best fits a Personal Contract in insurance?

• A. Policies cover people who own and operate things, such as automobiles.
• B. Policies cover only corporate entities.
• C. Policies cover real property only.
• D. Policies cover investment accounts.

Answer: (A)

Personal contracts in insurance are agreements made with individuals or families to cover their personal risks, rather than business or corporate interests. This means the policy is tied to the person who owns or uses the property, not to a company or organization. An auto policy is a classic example because it protects the person who owns and operates the vehicle, reflecting a personal relationship between the insured and the coverage.

The other descriptions describe nonpersonal or commercial scenarios: policies that insure corporate entities are commercial lines, not personal contracts; policies that cover real property only describe a type of property coverage rather than a personal risk contract; and policies covering investment accounts are not typical personal contracts.