What does an insurer require to view a risk as "insurable"?

An insurer considers a risk "insurable" primarily when it is well-defined. A well-defined risk allows the insurer to assess and evaluate the potential for loss accurately. This involves clear parameters around the risk, such as the nature of the risk, the likelihood of occurrence, and the potential impact. With a well-defined risk, insurers can use statistical data and historical information to make informed decisions about coverage, premiums, and conditions.

In contrast, options like high likelihood of loss avoidance, minimized premiums, or substantial property value do not solely determine insurability. While these factors might influence the insurer's decision-making process, they do not encompass the fundamental requirement of clarity and definition in understanding the risk involved. An insurable risk must be quantifiable and manageable, leading to the conclusion that having a well-defined risk is essential for it to be considered insurable.