Uninsurable Risk

DEFINITION of 'Uninsurable Risk'

A hazard or condition that has either a high likelihood of loss, or in which the insurance would be considered against the law. Insurance companies limit their losses by not taking on certain risks that are very likely to soon result in a loss. Many states offer insurance for otherwise uninsurable risks through their "high-risk pools"; however, lifetime benefits may be capped and premiums may be expensive.

BREAKING DOWN 'Uninsurable Risk'

A terminally-ill person would be considered an uninsurable risk by most insurers. Since the likelihood of death or long-term care is greater, insurance companies would have too much to lose by providing coverage.

RELATED TERMS
  1. Uninsured Motorist Coverage - UM

    An addition to a standard automobile insurance policy that provides ...
  2. Life Expectancy Method

    A method of calculating annuity payments, by dividing the balance ...
  3. American Risk and Insurance Association

    A professional organization for academics and associates in the ...
  4. Actuary

    A professional dealing with the assessment and management of ...
  5. Actuarial Risk

    The risk that the assumptions that actuaries implement into a ...
  6. Life Expectancy

    Life expectancy in social science is the statistical age until ...
Related Articles
  1. Home & Auto

    The History Of Insurance

    The first written policy appeared in Hammurabi's Code. Find out how it evolved from there.
  2. Home & Auto

    How An Insurance Company Determines Your Premiums

    Find out how insurers use credit history to build an insurance score and how it could affect your bottom line.
  3. Insurance

    15 Insurance Policies You Don't Need

    Learn how to save money by saying "no" to unnecessary coverage.
  4. Home & Auto

    A New Approach To Long-Term Care Insurance

    This practical product can protect you from the rising cost of care and provide for your beneficiaries at the same time.
  5. Home & Auto

    Long-Term Care Insurance: Who Needs It?

    No one is immune to the possibility of one day needing long-term care - and the costs can deplete a life savings.
  6. Retirement

    Shopping the New Retirement Products

    There are more options than ever for retirement portfolios these days. Choosing the right product comes down to your needs, time and management style.
  7. Your Practice

    Advisors: Win Over Millennials with Insurance

    Millennials don’t have the same values and goals as previous generations. Here are some tips on how advisors can adapt to their needs and wants.
  8. Insurance

    Cashing In Your Life Insurance

    In tough economic times, tapping into a life insurance policy can provide a needed source of funds.
  9. Insurance

    Which Life Insurance is Right For You?

    Consumers have choices when it comes to life insurance. Knowing your future needs for cash or retirement can make the difference in what you select.
  10. Insurance

    6 Best Renters Insurance Providers

    Here are six companies that consistently offer excellent renters insurance at competitive rates.
RELATED FAQS
  1. What's the difference between Social Security Disability Insurance (SSDI) and Supplemental ...

    Disabled persons can receive payments through two programs: Social Security Disability Insurance and Supplemental Security ... Read Full Answer >>
  2. Does renters insurance cover personal injuries?

    Renters insurance provides two main forms of coverage – liability and contents insurance – and they are offered together ... Read Full Answer >>
  3. Does renters insurance cover jewelry?

    Renters insurance provides personal property coverage that covers your personal property – including jewelry – in case of ... Read Full Answer >>
  4. Why might landlords require renters insurance?

    Landlords can require renters insurance to lower their own liability and insurance costs. According to data from the Insurance ... Read Full Answer >>
  5. What is the expense ratio in the insurance industry?

    The expense ratio in the insurance industry is a measure of profitability calculated by dividing the expenses associated ... Read Full Answer >>
  6. What is the difference between a peril and a hazard?

    The two related terms "peril" and "hazard" are often used in reference to the insurance industry. Essentially, a peril is ... Read Full Answer >>
Hot Definitions
  1. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  2. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  3. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  4. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  5. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center