Risk with insurance

Risk means uncertainty about the risk of loss, such as collide with cars and larceny or home is vulnerable to fire, etc.

Type of risk.
1. Speculative Risk is the risk that events could be the catalyst to fall under the risk of profit or loss such as stock exchange which may have a gain or loss. The risk of this type can not be assured.

2. Pure Risk is the risk of loss or damage. This could happen or not happen at every house as it is possible to fire. But not necessarily the only or not. The risk is the risk within the meaning of this type of insurance. The risk of this type are prone to be insured.


Peril means a cause of loss such as fire, windstorm, lightning, accidents, disasters, etc. Which do not know in advance is uncertain. Once the damage has already occurred.

Hazard means anything that would cause a disaster. Or enhance the losses from disasters such as machines, with no fence around it that the workers may have been injured or lost.

Hazard have 3 reasons

1.Physical Hazard is the cause of the disaster or by the nature of the property or the environment, for example, the manufacture of gunpowder in the building. Increases the chance of loss resulting from the explosion.

2.Moral Harzard the cause of the disaster or the conditions that increase the frequency. Or severity of loss due to habit. Or dishonesty of the insured committed fraud, such as the assured arson property insurance for a security deposit etc.

3.Morale Hazard is the cause of the disaster caused by the mind or consciousness are not insured to take care of their own assets, such as books, stacks of paper under my stairs. This will increase the chance of loss due to the increasing threat.