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Peril vs. Hazard

P: 7/18/2010 7:58:19 PM

khromas49454

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Total Posts: 74
Last Post: 8/18/2010
Member Since: 10/18/2007

Been too quiet around here so let's see if we can get some discussions going. What are the differences between a "peril" and a "hazard" as found within the standard insurance policy? (Doesn't matter whether HO or CP since we are looking at basic principles of insurance.) Kevin Hromas JD, RPA, PLCS, WIND Umpire EGA - Houston, TX

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P: 7/20/2010 3:06:29 PM

khromas49454

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Total Posts: 74
Last Post: 8/18/2010
Member Since: 10/18/2007

HELLLLOOOOOO????? Anybody out there?

(Man ... the silence is deafening arond here. Is there anyone left in the business?)

I guess I'll go ahead with at least the first part of the answer.

PERIL - the actual cause of the damages resulting in financial loss (Fire, hail, windstorm, etc.)

HAZARD - anything that increases the likelihood that a financial loss or "peril" will occur.

Give it another shot here with this follow-up for anyone who wants to give it a try.

What are the 3 general categories of "hazards"?

Kevin Hromas - JD, RPA, PLCS, WIND Umpire

EGA - Houston, TX

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P: 7/20/2010 5:33:28 PM

Toby

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I think I know of two, that would be moral, morale.

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P: 7/20/2010 6:05:58 PM

khromas49454

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Total Posts: 74
Last Post: 8/18/2010
Member Since: 10/18/2007

Good job ... those are actually the two tougher ones. The 3rd should be a little more obvious.

Moral Hazard - a subjective measurement based on the character and particular circumstances of a specific insured. The most obvious would be dishonesty on the part of an Insured or even a Class that is intent on profiting from injury or damage.

Morale Hazard - a subjective measurement based on the attitude of an Insured or indifference toward safety or preventative measures to stop loss or damages before they occurr. Things like failing to mop up spills, leaving exposed wiring out, not re-painting weathered wood, etc.

Seeing these two should give you a hint toward what the 3rd would be.

(Hand-in-hand with morale hazard.)

(And to make it even more interesting, this was a trick question .... 'cause there is actually a 4th hazard as well ... just not as obvious to the naked eye.)

Kevin Hromas

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P: 7/21/2010 9:02:26 AM

Toby

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I beleive the other hazard involves one that you subject yourself to, like an errant baseball at a game , or a racecar hitting you at a racing event?

Revisions : 0 | Posted: 7/21/2010 9:02:26 AM | IP: Recorded | Report this post

P: 7/21/2010 12:12:30 PM

khromas49454

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Total Posts: 74
Last Post: 8/18/2010
Member Since: 10/18/2007

Close, but remember we are talking about the direct relationship between an Insured and the Insurer and the conditions found within a policy between these two parties.

The 3rd hazard is the PHYSICAL HAZARD that is usually the manifestation of the morale hazards brought about by the Insured's indifference. The actual frayed wires that start a fire, a slick, coated floor that is more susceptible to slips around dangerous equipment, rotted siding that allows water inside a structure, etc.

The "trick question" answer of the 4th one is the LEGAL HAZARD. This is the possible exposure to punitive measures that rise out of lawsuits related to covered claims.

Kevin Hromas

JD, RPA, PLCS, WIND Umpire

EGA - Houston, TX

Revisions : 0 | Posted: 7/21/2010 12:12:30 PM | IP: Recorded | Report this post

Ideal BB Version: 0.1.5.3c