What is the difference between a contract and an insurance policy?

A contract and an insurance policy are both legal documents that are used to protect both parties involved. However, there are a few key differences between the two. A contract is an agreement between two parties that outlines the roles and terms for both parties including what will be exchanged, timelines, responsibilities, and so on. Generally, contracts are legally binding agreements and are enforced by the court system. On the other hand, an insurance policy is a contract between an insurance company and an individual or business. The policy outlines how and when losses will be covered by the insurance company in the event of an accident or disaster. In California, insurance companies must follow the regulations outlined in the California Insurance Code, which governs the selection and amount of coverage for each type of policy. Overall, the main distinctions between a contract and an insurance policy are that one outlines the terms and stipulations for both parties, while the other is an agreement with an insurance company to provide coverage in the event of a disaster or accident.

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What is the difference between a contract and an insurance policy?

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