1. An insurance policy is a unilateral contract because:

Only the insurer makes a legally enforceable promise

In a unilateral contract, only the insurer makes a legally enforceable promise to pay covered losses.

2. Choosing a high deductible so the insured pays more small losses themselves is an example of risk:

Retention

Accepting a higher deductible is a form of risk retention because the insured keeps more of the smaller losses.

3. An insurance policy is considered a personal contract because it:

Insures the person or interest rather than the property itself, and generally needs insurer consent to assign

An insurance contract is personal: it insures a person's interest and generally cannot be assigned to another without the insurer's consent.

4. Installing a sprinkler system to lessen fire damage is an example of risk:

Reduction

Risk reduction (loss control) uses measures such as sprinklers to lower the frequency or severity of losses.