Anonymous
Mar 22
What are some of the ideal characteristics of an insurable exposure?
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Mar 22
1. Definite and measurable: The exposure should be clearly defined and quantifiable in terms of the potential loss that could occur.
2. Accidental and unintentional: The exposure should be unexpected and beyond the control of the insured party.
3. Financially significant: The potential loss should be large enough to justify the cost of insurance coverage.
4. Independent and non-catastrophic: The exposure should not be correlated with other risks or events that could lead to widespread losses.
5. Predictable and stable: The likelihood and severity of the loss should be relatively consistent over time.
6. Legal and insurable interest: The insured party must have a legitimate financial interest in the subject of the insurance policy.
7. Not subject to moral hazard: The insured party should not have an incentive to intentionally cause or exaggerate the loss in order to collect insurance benefits.
2. Accidental and unintentional: The exposure should be unexpected and beyond the control of the insured party.
3. Financially significant: The potential loss should be large enough to justify the cost of insurance coverage.
4. Independent and non-catastrophic: The exposure should not be correlated with other risks or events that could lead to widespread losses.
5. Predictable and stable: The likelihood and severity of the loss should be relatively consistent over time.
6. Legal and insurable interest: The insured party must have a legitimate financial interest in the subject of the insurance policy.
7. Not subject to moral hazard: The insured party should not have an incentive to intentionally cause or exaggerate the loss in order to collect insurance benefits.
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