If $bad_thing happens more often, that doesn't mean it stops being insurable. It just means the rates go up. Things become uninsurable when either they're unpr

If $bad_thing happens more often, that doesn't mean it stops being insurable. It just means the rates go up. Things become uninsurable when either they're unpredictable in aggregate (I can't predict when your house will catch fire from leaving the stove on, but a decent actuary can say how many houses that will happen to next year), or when the government sets price controls to forbid them charging high enough rates. . "More fires" does not prevent fire insurance, unless the government imposes price controls. "Fewer bigger fires" might, since they'd be harder to average out.