Why insurance contract is one sided contract?

Answer 1

Insurance contracts are not one sided. There are two parties to the contract. The insurance company who agrees to insure the insured party. The insured party who agrees to make the premium payments. Thus a contract.

While the foregoing is broadly true (although there can be many more than 2 parties to a contract), what the question may really be asking is why insurance contracts are characterized as adhesion contracts.

An adhesion contract is one which is essentially non-negotiable and offered on a "take it or leave it" basis. In the case of insurance, the insurer chooses the language of the policy, and at least as far as most types of consumer insurance is concerned, the language is not negotiable.

However, if a coverage dispute arises and the parties litigate over the policy (whether or not an event is covered), the court will determine whether or not there was an ambiguity in the terms of coverage. In that respect, an ambiguity is a term or a phrase that can be construed alternately as affording coverage for the event or not affording coverage. In general, if the court finds that there was an ambiguity, it will usually determine that there is coverage for the event (because the insured had no role in choosing the language of the policy, and if the insurer wanted to specifically exclude coverage, it could have chosen different wording). That said, a court will not accept a twisted meaning of a term or phrase so as to create an ambiguity-the term or phrase will be given its usual and ordinary meaning unless specifically defined otherwise in the policy.