General Insurance PrinciplesQuestion 129 of 158
An applicant for a homeowners policy admits she has filed four small jewelry-theft claims in the last three years, two of which were closed as suspicious. This is BEST described as which type of hazard?
a.Moral hazard
b.Physical hazard
c.Morale hazard
d.Fundamental peril
Explanation
A pattern of suspicious prior claims signals dishonest tendencies in the applicant, which is the textbook definition of a moral hazard. A physical hazard is a tangible condition; a morale hazard is mere carelessness because coverage exists; 'fundamental peril' is not a hazard classification.
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Related questions on this topic
- Which of the following is a PURE risk and therefore potentially insurable?
- Which characteristic is NOT one of the elements of an ideally insurable risk (the DICE test)?
- Leaving the garage door open all day because 'my homeowners policy will pay if anything is stolen' is an example of which type of hazard?
- Because only the insurer makes a legally enforceable promise to perform under an insurance policy, the contract is classified as:
- Because the insured cannot negotiate the wording of a standard homeowners policy, ambiguous language in the policy will generally be interpreted:
- Under California Insurance Code §331, a MATERIAL concealment by the applicant entitles the insurer to rescind the policy:
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