Question

Difference between uninsurable and insurable risks give example of how the hollard explain these concepts to their clients?

Answer 1

A risk which meets the criteria for insurance is an insurable risk. The risk for which an insurer cannot hope to pay, for example some catastrophic risk is not an insurable risk.

An uninsurable risk is a hazard or condition which has a great likelihood of loss, or which cannot be insured because it is not lawful to provide insurance for it.

A risk can be insurable if:

1. The insurer can charge a sufficient amount of premium to cover the claims expenses as well as the insurer's expenses.

2. The loss should be financially measurable and definite.

3. The loss must be random.

Risks which are too large cannot be insured because very high premiums will have to be charged which will not be suitable.