Arkansas Insurance Adjuster Practice Exam

A 'hazard' is defined as:

1. an unexpected event that causes loss

2. an insured item

3. something that increases the chance of a loss

4. the likelihood of experiencing a loss

The correct answer is: something that increases the chance of a loss

A 'hazard' is defined as something that increases the chance of a loss. This means that it can increase the likelihood or frequency of a loss occurring. Option A is incorrect because not all hazards may result in an unexpected event causing loss. Option B is incorrect because a hazard is not an insured item, it is the reason why an item may become damaged or lost. Option D is incorrect because a hazard is not the likelihood itself, but rather a factor that can contribute to the likelihood of experiencing a loss. It is important to understand hazards in order to assess and manage risks effectively.