ECONOMICS
INSURANCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The chance of a gain or loss to occur
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The cause or source of loss
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The condition which increases the probability of a loss
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The reduction of value
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Detailed explanation-1: -A peril is the direct cause of a loss, or the source of the loss. For example, if your house is damaged by a lightning strike, the lightning strike is considered to be the peril. If your house catches on fire, then fire will likely be considered the peril.
Detailed explanation-2: -Last updated: December 2018. A peril is an event, like a fire or break-in, that may damage your home or belongings.
Detailed explanation-3: -Risk is the chance or probability of a loss, and peril is a direct cause of loss. If, as in my case, which I share starting on page 48 of this issue, there is a flood from a broken pipe, then the peril is water. A hazard is anything that causes or increases the likelihood of a loss.
Detailed explanation-4: -What are perils and hazards? In the world of insurance, a “peril” is an event or circumstance that results in property damage. Your homeowners, condo, or renters policy contains a list of covered perils, such as fire, lightning, and vandalism.
Detailed explanation-5: -A peril, as distinguished from a hazard, is defined as. (a) a condition that increases the likelihood of loss. (b) the cause of a loss.