General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An insurance policy covers only losses that are fortuitous. A loss is fortuitous when it is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A fortuitous loss is accidental, unexpected, and generally beyond the insured's control - the event was not intended by the insured. Fortuity is essential because it keeps losses random, which is what allows pooling and the law of large numbers to work. An intentional loss is not fortuitous and is excluded, and a known or certain event involves no risk to insure.
Why the other options are wrong
- B) A deliberate, intentional loss is the opposite of fortuitous and would constitute a moral hazard.
- C) A loss already known to the parties at issuance is not contingent and cannot be newly insured.
- D) A certain event involves no risk; insurance responds to uncertain contingencies.
Memory hook
Fortuitous = accidental from the insured's point of view. Intent cancels coverage.