Insurable losses do not all happen at once and the individual losses are not large enough to end up bankrupting the insurer; insurers may also prefer to limit their possible exposure to a loss from a single event to a fixed small portion of their capital base.
Because of capital constraints, insurers are generally unable to sell earthquake insurance or wind insurance in hurricane zones.
In the United States, flood risk is insured by the federal government. For example, flood risk is insured by the federal government instead of by private insurance companies.
These properties are typically shared among multiple insurers or are taken on by a single insurer who then syndicates the risk into the reinsurance market.