General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
A 'peril,' as used in insurance, is best defined as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A peril is the event or cause of loss — the specific occurrence that produces the damage, such as fire, windstorm, theft, or a slip-and-fall accident. Policies are written to cover stated perils. A hazard, by contrast, is a condition that increases the chance that a peril will occur. Distinguishing the peril from the hazard is a fundamental step in classifying risks.
Why the other options are wrong
- B) A condition that increases the chance of loss is a hazard, not a peril.
- C) The uncertainty of loss is the definition of risk, a separate concept from the cause of loss.
- D) The dollar amount of a covered loss is the loss amount, not the peril that caused it.
Memory hook
Peril = the fire, the crash, the illness. Hazard = the leaky wiring that made it likelier.