General Insurance PrinciplesQuestion 167 of 474
A windstorm tears shingles off a roof that a poor repair had left loose. In insurance terms, the windstorm is:
a.the loss, and the loose repair work is the peril
b.a hazard, and the loose repair work is the risk
c.a hazard, and the loose repair work is the peril
d.the peril, and the loose repair is a hazard
Explanation
A peril is the cause of loss itself, such as wind, fire or theft. A hazard is a condition that increases the likelihood or the severity of that cause operating, which is what sloppy repair work does. The choice that calls the wind a hazard reverses the two terms, and the loss is the resulting reduction in value, not a cause.
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