What is typically not covered by insurance due to its nature?

Predictable losses are typically not covered by insurance because they are considered foreseeable and manageable risks. Insurance is designed to protect against unforeseen events that can cause financial loss, such as accidents or natural disasters, which are inherently unpredictable. When losses can be reliably anticipated and quantified, they fall outside the scope of insurance, since policyholders can prepare or plan for them in advance.

For instance, if a business knows that certain weather patterns lead to flooding in a specific area every year, the losses due to flooding would be predictable. As such, insurers would not cover these losses as they do not fit the risk profile that insurance aims to address, which is unexpected and unintended losses. Coverage is intended for scenarios where uncertainty plays a significant role, making unpredictable losses more suited for insurance protection.