Terminology Help

[yaymeq]

Hey, I just got started with my studying to take the exam, the forum where I'm studying isn't very active so I wanted to come here. Is that alright? I'll be sure to give lots of advice when I finally get to that point in my career!

If a person leaves a fire going in a fireplace when they have to rush out for some reason, is that a physical hazard or a morale hazard?

The examples I was given of a physical hazard, (storing flammables next to a heater) sound a lot like carelessness to me. Isn't carelessness the definition of a Morale hazard though? So what's the difference?

 

[Briefcaseboy]

Yaymeq,
Yes, it is a legitimate question, but you need to go to the Property and Casualty side of the forum to ask the question.

 

[leevena]

Morale needs indifference on the part of the person. If I own a beach home in the area of high hurricane activity (gulf of mexico or north carolina) and I purposely avoid buying coverage because the govt has always bailed us out, this would be morale.

Now back to your example it sounds like physical.

 

[b61mack]

if you need help, i would check out. america's professor. he is a professor from u of montana. very good course. if he doesn't have your state, get the national test...

 

[Cornelius]

Who are you using for prelicensing? Usually you can just call them for clarification of a question.

 

[arnguy]

Wait a minute, morale or moral----big difference. I'm not into P&C, but I cannot believe that morale enters into it. Moral would be the definitive noun.

 

[Guest]

I have to admit, I dont remember anything about moral or physical hazard. I reread a couple times and that just doesnt ring a bell. I cant ever recall hearing those terms related to insurance.

I cant imagine a claims person saying we arent covering this because its a morale hazard???

I would think, in your example with the fireplace, it would be both!

 

[leevena]

There is both a morale and moral hazard. They do appear to be the same but they are not.

As I mentioned in an early post, a MORALE hazard needs indifference on the part of the person. If I own a beach home in the area of high hurricane activity (gulf of mexico or north carolina) and I purposely avoid buying coverage because the govt has always bailed us out, this would be morale.

A MORAL hazard is when one party (the insured or agent) has more information than the other (the carrier) and uses that information to thier advantage.

 

[b61mack]

i dusted off my text book(america's professor). red blooded is right. three types of hazards.1. physical hazard (if you can see it or touch it), 2. morale hazard (carelessness, sloppiness),3. moral hazard deliberate or disregard that causes the loss.

 

[ktchester]

I found these examples online.
Moral hazard - conditions resulting from a weakness of human character (when someone should know the difference between right and wrong) such as embezzlement.

Moral hazard - conditins resulting fomr a person's indifferent attitude towards a loss when a property of exposure is insured, such as failing to lock the doors or roll up the windows in the car or leaving valuable objects in plain site.

Per this defintion, I would say moral.