Limitations of Insurance

Despite the number of insurance benefit, it has certain limitations. On account of such restrictions, could not be availed of full insurance coverage.

A. All risks can not be insured. Just pure and speculative risks can be insured risk is not insurable.

B. Insurable interest (financial interest) insurance that time, or loss of, or both at the time of admission to insurance matters, must have been ineffective in the absence of a contract of insurance.

C. If the losses can not be valued in terms of money arises from happening, such as the risk is not insurable.

D. A single person or a small group of individuals to insure against risk, since it is not realistic due to the high costs involved, is not advisable.

E. Another important limitation is that the premium rate in our country and the people, can not benefit specific categories, such as insurance benefits are higher. The main reason is the high operating costs of the premium rate.

F. Insurance moral hazard is difficult to control it. There are some people who claim false claims to insurance companies and insurance plans can apply for their interests.