Question: What Is A Condition That Creates Or Increases The Chance Of Loss?

What is the condition that creates or increases the likelihood of loss occurrence?

Hazard: Condition that increases the probability of loss..

What is chance loss?

In insurance terms, this is the likelihood that an event (such as death or injury) will happen.

Is uncertainty concerning the occurrence of a loss?

Risk: uncertainty concerning the occurrence of a loss. Loss Exposure: Any situation or circumstance in which a loss is possible, regardless of whether a loss occurs.

What are standard perils?

A peril is an event, like a fire or break-in, that may damage your home or belongings. The perils covered by your homeowners insurance are listed in your policy. … Damage from an aircraft, car or vehicle. Theft. Falling objects.

What are the basic perils?

Basic form covers these 11 “perils” or causes of loss: Fire or Lightning, Smoke, Windstorm or Hail, Explosion, Riot or Civil Commotion, Aircraft (striking the property), Vehicles (striking the property), Glass Breakage, Vandalism & Malicious Mischief, Theft, and Volcanic Eruption.

Which of the following is an example of morale hazard?

For example, suppose a person pays insurance for his new phone. Morale hazard arises when the model of his phone becomes outdated, and he no longer cares about it. He is indifferent to his phone getting damaged because his insurance would allow him to get a new one.

What is the difference between risk and loss?

A RISK is a potential for a LOSS. The LOSS is the realization of that negative potential. A RISK without LOSS is when you pull the trigger and the hammer hits an empty chamber. …

Which of the following terms best describes something that increases the chance of a loss occurring from a particular peril?

Which of the following terms best describes something that increases the chance of a loss occurring from a particular peril? A hazard is distinguished from exposure as being something that elevates the chance of a loss occurring.

What do you call a condition or situation that presents a possibility of loss?

Click for Answer and Explanation. Answer: D. A condition or situation that presents a possibility of loss is an exposure. Insurance policies are designed to cover loss, either a direct loss or an indirect loss.

What are the 3 categories of perils?

natural perils. One of the three categories of perils commonly considered by insurance, the other two being human perils and economic perils. This category includes such perils as injury and damage caused by natural elements such as rain, ice, snow, typhoon, hurricane, volcano, wave action, wind, earthquake, or flood.

What are the 16 named perils?

Usually, named perils policies cover loss or damage from these 16 events:Fire or lightning.Windstorm or hail.Explosion.Riot or civil commotion.Aircraft.Vehicles.Smoke.Vandalism.More items…

What are the 3 types of risk?

Risk and Types of Risks: There are different types of risks that a firm might face and needs to overcome. Widely, risks can be classified into three types: Business Risk, Non-Business Risk, and Financial Risk.

What are examples of risks?

Examples of uncertainty-based risks include:damage by fire, flood or other natural disasters.unexpected financial loss due to an economic downturn, or bankruptcy of other businesses that owe you money.loss of important suppliers or customers.decrease in market share because new competitors or products enter the market.More items…•

What best defines a hazard?

A hazard is any source of potential damage, harm or adverse health effects on something or someone. Basically, a hazard is the potential for harm or an adverse effect (for example, to people as health effects, to organizations as property or equipment losses, or to the environment).

What are the four common methods of risk management?

The basic methods for risk management—avoidance, retention, sharing, transferring, and loss prevention and reduction—can apply to all facets of an individual’s life and can pay off in the long run.