Module 1-G - Types of Hazards and Frauds

Question 1

Insurance Fraud

Answer 1

Using insurance to obtain money unlawfully. This can be done by a policyholder, or by
an insurer or an insurer’s employees. There are two kinds of insurance fraud: soft fraud
and hard fraud.

Question 2

Fraud - Hard

Answer 2

Deliberately faking or causing an incident in order to collect money.

Question 3

Fraud - Soft

Answer 3

Inflating the gravity or the extent of claims in order to receive a higher indemnification.

Question 4

Hazard

Answer 4

An instance, behavior, or condition that increases the chance of incurring a loss, or
increases the severity of the loss.

Question 5

Hazard - Legal

Answer 5

Any legal action that increases the chance of a loss.

Question 6

Hazard - Moral

Answer 6

Occurs when an insured person consciously and deliberately acts in a way that is more likely to result in a loss.

Question 7

Hazard - Morale

Answer 7

Unconscious tendency of insured people to engage in riskier behavior.

Question 8

Hazard - Physical

Answer 8

Any physical condition that increases the chance of a loss.