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. Personal Lines Insurance

    Property and casualty insurance products for individuals that ...
  2. Assigned Risk

    A risk that an insurance company is required to provide coverage ...
  3. Uninsurable Peril

    Events or situations that insurance coverage is not available ...
  4. Uninsured Motorist Coverage - UM

    An addition to a standard automobile insurance policy that provides ...
  5. Finite Risk Insurance

    An insurance contract in which the insured provides a pool of ...
  6. Insurance Premium

    The amount of money that an individual or business must pay for ...
Related Articles
  1. Home & Auto

    Intro To Insurance: Fundamentals Of Insurance

    By Cathy ParetoHow does insurance work? Insurance works by pooling risk.What does this mean? It simply means that a large group of people who want to insure against a particular loss pay their ...
  2. Insurance

    Explaining Insurance

    Insurance is a form of contract between an individual and an insurance company that spreads risk in exchange for premium payments.
  3. Investing Basics

    The Industry Handbook: The Insurance Industry

    As a result of globalization, deregulation and terrorist attacks, the insurance industry has gone through a tremendous transformation over the past decade. In the simplest terms, insurance of ...
  4. Home & Auto

    Intro To Insurance: Conclusion

    By Cathy ParetoInsurance is an integral part of any personal financial plan. The type of insurance and the amount of coverage you obtain all depends on your unique financial and family circumstances, ...
  5. Professionals

    Introduction to the Principles of Risk and Insurance

    Introduction to the Principles of Risk and Insurance
  6. Home & Auto

    6 Ways To Save On Insurance

    Love it or hate it, insurance policies are a necessary expense in everyone's life. Learn the top tricks for saving money on your various insurance policies.
  7. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  8. Professionals

    Introduction to Life Insurance

    Introduction to Life Insurance
  9. Home & Auto

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  10. Home & Auto

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
RELATED FAQS
  1. What do insurance companies qualify as hazardous activity?

    Learn about activities that insurance companies classify as hazardous, and the effects this has on individuals seeking insurance ... Read Answer >>
  2. What caused the European / Eurozone debt crisis?

    Understand how insurance companies price insurance premiums, and learn the importance of data and statistics in the insurance ... Read Answer >>
  3. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  4. What risks do I face when investing in the insurance sector?

    Read about the unique challenges faced by insurers, and learn how those challenges manifest themselves as risks for equity ... Read Answer >>
  5. How might having insurance increase moral hazard?

    Would you drive safely if your insurance company knew nothing about your driving habits? Learn how insurance increases moral ... Read Answer >>
  6. Can my insurance company refuse me coverage?

    Insurance isn't always as straightforward as other products. Insurers can deny coverage in many different instances:Non-Renewal ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center