What term describes conditions that increase the likelihood of an insured loss?

The correct term for conditions that increase the likelihood of an insured loss is "hazards." Hazards are factors that can increase the probability of a loss occurring. They can be classified into different types, such as physical hazards (which involve the actual condition or environment), moral hazards (which relate to the subjective attitudes or behaviors of the insured), and morale hazards (which are about carelessness or a change in behavior due to having insurance).

Understanding hazards is crucial for insurers, as they consider these factors while underwriting policies. An increase in hazards can lead to a higher likelihood of losses, thereby influencing insurance premiums and coverage options. This comprehension ensures that risks are appropriately assessed and managed within the insurance framework.

Perils refer to the specific causes of loss, such as fire, theft, or windstorm, rather than the conditions contributing to the likelihood of those losses. Claims pertain to the requests for payment or benefits by insured individuals after a loss has occurred. Risk factors generally cover a broader category, which can include hazards but also encompasses various aspects of risk evaluation that are not limited to conditions increasing loss likelihood.