A conditional insurance contract is an agreement between the insurer and the insured party based on specific terms and conditions. In the implementation of this agreement, conditions are to be met. According to this contract, the insurer provides some coverage to the policyholder for unforeseen events if they occur during the period of an agreement. The obligations part of this agreement is the insurer offers coverage and pays out after meeting the conditions, such as the policyholder having to pay a premium and other terms that are described under the policy.