General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
An insured who regularly texts while driving is seriously injured in an automobile accident and submits a claim under an individual health insurance policy. From the insurer's perspective, which of the following is the hazard in this situation?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
A hazard is a condition or behavior that increases the likelihood or severity of a loss. The insured's habit of texting while driving raises the probability that an automobile accident will occur, so it is the hazard. The accident itself is the peril - the event that actually causes the injury and the resulting medical loss. Insurers care about hazards because they affect the frequency of the perils they insure, even though the hazard is never the direct cause of any individual claim.
Why the other options are wrong
- A) The automobile accident is the peril - the event that actually causes the injury and produces the covered claim.
- C) The medical expenses are the loss the insurer must pay, not a condition that influences how likely the accident is.
- D) Purchasing insurance is a risk-transfer decision, not a condition that increases the chance of loss.
Memory hook
The crash is the peril, the wet road is the hazard, and the risk was there all along.