Which term refers to the nature of an insurance contract where one party has more information than the other?

The term that refers to the nature of an insurance contract where one party has more information than the other is adhesion. In an adhesion contract, the terms are drafted by one party (usually the insurer), and the other party (the insured) must accept those terms without the ability to negotiate. This inherently creates an imbalance of information, as the insurer typically has detailed knowledge about the policy, risk assessment, and underwriting guidelines, while the insured may not possess the same level of understanding or detail about the contract terms and conditions.

This lack of parity in information can lead to the insured feeling bound to the terms without fully comprehending them, which is characteristic of adhesion contracts. The unbalanced information dynamic is a hallmark of this type of contractual relationship, emphasizing the importance of clarity and transparency in insurance agreements.