What term refers to the cause of loss in insurance?

The term that refers to the cause of loss in insurance is "Peril." In the context of insurance, a peril is an event or situation that can result in a financial loss, such as fire, theft, or natural disasters. Understanding perils is essential for both insurers and policyholders, as it helps define what risks are covered by a particular insurance policy.

In general insurance terminology, "hazard" denotes a condition or situation that increases the likelihood of a peril occurring, while "loss" refers to the actual damage that occurs due to a peril. "Adverse selection" is related to the tendency of people with higher risks to seek insurance more frequently than those with lower risks, which can affect pricing and coverage availability.

Identifying perils is crucial in underwriting and claims processes, as policies are designed to respond to specific perils outlined within the contract.