Consideration is what each party brings to the table in the contract. Each party must be considerate and give something of value to the other party.
The insured’s consideration is twofold. He or she:
- Pays money, called premium, for the insurance policy.
- Must be honest and truthful when answering questions and providing information.
The insurer’s consideration is:
- The promise to provide insurance coverage and pay claims when the insured suffers a covered loss.