General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Which of the following risks would generally be considered insurable?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
The chance that an accident will cause medical expenses is a pure risk: there is only the possibility of loss or no loss, and the loss is fortuitous, measurable, and unintended. Pure risks are exactly the type of exposure that insurers are designed to handle. The other choices all carry a chance of gain, making them speculative risks that are generally uninsurable because the insured could profit from the arrangement and the element of fortuity would be lost.
Why the other options are wrong
- A) A business venture carries a chance of profit, making it a speculative risk that is not generally insurable.
- B) A stock price decline is a speculative risk; the investor could just as easily realize a gain on the same position.
- D) A lottery ticket deliberately involves the chance of gain and is a wager rather than an insurable pure risk.
Memory hook
Accidents and illnesses are insurable; bets and business ventures are not.