General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A client asks why a bet placed on a sporting event cannot be insured the way medical expenses can. The best answer is that the wager is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A wager is a speculative risk because the bettor may gain as well as lose. Insurance covers pure risks, where the insured can only lose or break even. If insurance paid on a wager, the insured would have a chance of profit, which conflicts with the purpose of insurance to indemnify against loss. Speculative risks are therefore not proper subjects for insurance, regardless of premium.
Why the other options are wrong
- B) The wager's outcome is uncertain, and it is a speculative risk because of the possibility of gain — not a pure risk.
- C) No premium amount converts a speculative risk into an insurable one; the presence of a gain possibility disqualifies it.
- D) Form (individual or group) does not change a speculative risk into an insurable pure risk.
Memory hook
If you can win, insurance won't cover it. Insurance only plays games you cannot profit from.