Which statement about insurable risks is NOT true?

Insurable risks are characterized by specific properties that make them suitable for insurance underwriting. One of the fundamental aspects of an insurable risk is that it should be sufficiently defined and measurable, allowing insurance companies to calculate the potential losses and set premiums accordingly.

When we consider the statement about excessive magnitude, it is not a feature of insurable risks. In fact, risks that are excessive in magnitude can be too unpredictable and financially unmanageable for insurance providers. Insurers prefer risks that fall within a certain range of loss, as this allows them to mitigate potential losses and create a balanced pool of insured parties.

In contrast, insurable risks must also be common to many people or businesses, making them more viable for coverage. The ability to calculate the risk ensures that insurers can evaluate the probability of occurrence and associated costs effectively. Lastly, risks must be definite, meaning they can be clearly defined in terms of time, location, and cause, which allows for clarity in policy terms and conditions.

Therefore, stating that an insurable risk is excessive in magnitude contradicts the fundamental principles of what makes a risk insurable.