Risk is a very crucial part of any insurance programs. As you have understood that, at least there are four types of risks in insurance. They are Pure Risk, Speculative Risk, Particular Risk and Fundamental Risk. Each of them has different definition and not all of them can be claimed although they are considered as risk. It means that there are risks that can be claimed and not. Here is the explanation.
Not All Risks In Insurance Can Be Claimed
The questions like; are all risks can be claimed to the insurance company? Will you take it for your own? Or is it the responsibility of the government? Well, look at the short explanation below;
- Pure Risk can be insured and the risks are static.
- Fundamental Risk can be insured. But it can only be an extension of pure risk.
- Speculative Risk cannot be insured. The risk is dynamic (changing).
- Particular Risk cannot be insured.
Then you can take a conclusion that there are two risks in insurance that can be insured. They are Pure Risk and Fundamentals Risk. Surely, they can be insured under the terms. Here are some terms and conditions that you need to understand;
- Impacts should be assessed with money, which means that the risk needs to be financial risks.
- Risks are homogenous (same) and present in significant amounts (The law of the large number).
- Risks cannot be predicted, it should occur by chance and not intentionally.
- If the risks occur, thus, the client will have a loss, in means the insured client must have an insurable interest in the insured objects.
- The risk is not contrary to the public interest or law in the country. So, drugs (narcotics) should not be the insured object.
Now, you have known what risks in insurance that can be insured and what are not. This is important since not all clients who take insurance program understand so well about the risk. Remember, not all risks in Pure Risk can be insured. The insurable risks should be under specific terms and conditions.