What is the definition of Uninsurable Risk?

An Uninsurable Risk is a risk that insurance companies are unwilling to assume.

In this case, the act of providing insurance is illegal, or the possibility for loss is much too high. It may also be that the risk involves a criminal aspect or that assuming the risk is prohibited by public policy.

For life and health insurance, an uninsurable risk is someone who is terminally ill or whose medical examination shows the possibility that this person will have a lot of claims. Of course, an insurance company would be unwilling to insure a terminally ill patient, since the potential that the insurance company will pay for death benefits is very high and imminent.

Also, insurance companies will not provide protection for businesses such as illegal drug trafficking or insurance of stolen goods.

• Insolvency
• Misstatement of Age or Sex Provision
• Modified Premium Policies
• Moral Hazard
• Comprehensive Coverage