An insurable risk refers to a potential situation in which an insurance company evaluates the risk and determines insurability. An insurable risk is a risk that meets the ideal criteria for efficient insurance. However, some pure risks are not privately insurable. Which of the following statements is (are) true with respect to insurance and gambling? All of the following are ideal requirements that must be met for a risk to be privately insurable EXCEPT. 2-3- Characteristics of an Ideally Insurable Risk (requrements of an Insurable Risk) Private insurers insure only pure risks. The second example in Table 6.1 "Examples of Insurable and Uninsurable Risks" is the peril/risk of fire. A principle of insurance holds that only a small portion of a given group will experience loss at any one time. CHARACTERSITICS OF AN IDEAL INSURABLE RISK Economically feasible premium So people can afford to buy; Premium must be substantially less than the face value of the policy. a. 3. From the viewpoint of a private insurer, an insurable … - Selection from Principles of Risk Management and Insurance, 13th Edition [Book] Which of the requirements of an insurable risk are not met by the flood peril? Fire is an insurable risk because it meets all the required elements. Identify the ideal requirements of an insurable risk. a. The major cost of social insurance favor low-income groups such as social security, unemployment’s, and workers compensation. Ideal Requisites for Insurability – Part 1; 4. Types of Insurance and Insurers - … This typically requires that the risk have a few basic elements, including the fact that the risk must be random or due to chance and … However, some pure risks are not insurable. Why are most market risks, financial risks, production risks, and political risks … 4 marks 2. Students also viewed these Corporate Finance questions. Identify the ideal requirements of an insurable risk. You are required to answer the following questions. 1.4.4 Elements of Insurable Risk. The concept of insurable risk underlies nearly all insurance decisions. So we ask this question. Types of Insurance and Insurers - Part 1; 6. Characteristics of an Ideally Insurable Risk Private insurers generally insure only pure risks. Ideal Requisites for Insurability - Part 2; 5. One of the criteria for an insurable risk is that it NOT be catastrophic. Discuss the ideal requirements of an insurable risk. Building in flood zones are difficult to insure by private insurers because the ideal requirements of an insurable risk are difficult to meet. 1. the loss should be within the insured's control. Identify the ideal requirements of an insurable risk. Buildings in flood zones are difficult to insure by private insurers because the ideal requirements of an insurable risk are difficult to meet. The Nature of Insurance; 3. a. 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