Which of the following is NOT a characteristic of insurance contracts?

The choice of "liquidated contracts" as the correct answer highlights a key distinction between the types of contracts typically associated with insurance. In insurance, contracts are generally categorized as conditional, personal, and unilateral, but not liquidated.

Insurance contracts are called conditional because they require certain conditions to be met before coverage is triggered, such as the occurrence of a specific event like a loss or damage. They are also personal because they are based on the relationship between the insurer and the insured, meaning the insurer contracts with the individual policyholder rather than on a transferable basis. Lastly, insurance contracts are unilateral because they create an obligation for one party—the insurer—while the insured does not have an obligation until a claim is made.

In legal terms, a liquidated contract typically refers to agreements where the terms are clearly defined and all obligations are known, and it does not capture the inherently conditional nature of insurance agreements. This fundamental aspect of insurance contracts reflects the uncertainty involved in risk management, where not all outcomes can be predetermined. Therefore, identifying "liquidated contracts" as not being a characteristic of insurance contracts emphasizes the unique properties and frameworks that govern insurance agreements.