A risk classified is uninsurable when the
-
A.
extent of the loss can be calculated -
B.
risk will occur no matter the precaution taken -
C.
risk may not happen -
D.
insurance company cannot pay
Correct Answer: Option B
Explanation
Uninsurable risk is a condition that poses unknowable or unacceptable risk of loss or a situation in which the insurance would be against the law. Insurance companies limit their losses by not taking on certain risks that are very likely to result in a loss.
In many cases catastrophes, such as earthquakes, have become uninsurable risks. a situation for which an insurance company will not provide insurance, because, for example, it is certain to happen: A person suffering from a terminal illness is considered to be an uninsurable risk.