The uninsurable risk is a risk which insurance is avoided by most insurance companies because the probability of the related losses is almost unpredictable.
It is possible to be insured from natural disasters, such as flood or earthquake.
But insurance companies always reluctantly consider the possibility of cooperation when the risk is connected with shares of the government or the general economic situation.
Such uncertain factors as changes of the legislation and economic fluctuations, are beyond insurance.
Sometimes uninsurable risks become insured when enough data for exact assessment of the forthcoming losses are typed.
Treat uninsurable risks:
- Market risks are factors which can lead to loss of property or income, such as: seasonal or cyclic changes in price; indifference of consumers; changes of a fashion; the competitor offering more high-quality product.
- Policy risks – danger of emergence of such events, as: change of the government; war; restrictions of free trade; unreasonable or excessive taxes; restrictions of free currency exchange.
- Production risks – danger of such factors, as: non-economic operation of the equipment; shortage of raw material resources; need to solve technical issues; strikes, truancies, labor disputes.
- Personal risks – danger of such factors, as: unemployment; poverty owing to a divorce, a lack of education, lack of an opportunity to get a job or losses of health on military service.