What are the three elements necessary for an insurable risk?

The three essential elements necessary for an insurable risk are primarily centered around having a financial interest in the subject being insured, as this ensures that the insured has a legitimate stake in the property or life being covered. This principle exists to prevent moral hazard, where individuals might cause loss or damage to gain from an insurance payout if they have no financial investment in the item or person insured.

In the context of insurance, financial interest is paramount because it establishes the rationale for invoking the protections provided by an insurance policy. Without a financial stake, the incentive to manage risk diminishes, potentially leading to increased occurrences of fraud and opportunistic behavior.

While the other aspects mentioned in your answer choices, such as blood relationship or market demand, may relate to the broader context of insurance contracts, they do not constitute the necessary core elements for establishing insurable risks. Insurable risks require clear definitions of interest, clear terms leading to measurable losses, and a defined risk pool, which is not represented in the other combinations provided.