Non-insurable Risk

Definition - What does Non-insurable Risk mean?

A non-insurable risk is a risk an insurance company deems too hazardous or financially unpractical to take on. It can also refer to risks that are illegal for an insurance company to assume. By not taking them on, insurers can curb losses as non-insurable risks usually have extremely high probabilities of loss.

A non-insurable risk is also as an uninsurable risk.

Insuranceopedia explains Non-insurable Risk

Insurance companies do not take on non-insurable risks because they know they will almost certainly lose money very quickly in doing so. In other words, it is bad business to assume non-insurable risks.

For example, a life insurance company may deem a person who is 70 and has lung cancer a non-insurable risk because the likelihood of their death is simply too high. Sometimes, states provide certain types of insurance for non-insurable risks through "high-risk pools;" however, the premiums are often very high and feature limited coverage.

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