General Insurance PrinciplesQuestion 128 of 474
Which characteristic is NOT one of the elements of an ideally insurable risk (the DICE test)?
a.The loss must be definite in time, place, and amount
b.The risk must be speculative so the insurer can profit
c.The premium must be economically feasible
d.The loss must be calculable so a premium can be set
Explanation
The DICE test asks that a risk be Definite, Independent (not catastrophic), Calculable, and Economical. Speculative risks are EXCLUDED from insurability because they involve the possibility of gain, which would create a wagering contract.
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