What do you mean by offer and acceptance in insurance contract?

Offer and acceptance is the process of two parties entering into a contract; an agreement is reached
only after offer and acceptance between the contracting parties. If the party to whom the offer was
made requests a change in terms, a counteroffer is made, which releases the first offered from the
terms of the original offer. In the making of insurance contracts, the buyer usually offers to buy and
the insurer accepts or rejects the offer. When you call an insurance agent for insurance on your new
automobile and the agent provides coverage, there is an offer to buy and the agent has accepted the
offer on behalf of his or her company. As stated previously, this acceptance is called a binder. The
offer may be verbal, as in this case, or it may be in the form of a written application. This process
differs for life and health insurance.