Differentiate between uninsurable risks and insurable risks
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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.
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An insurable risk is a risk that meets the ideal criteria for efficient insurance.
A risk is uninsurable when an insurance company cannot calculate the probability of the risk and therefore cannot work out a premium that the business must pay. ... If the insurance company has enough statistics to work out the probability of the risk, this is called an insurable risk...
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