What do we call the cause of loss in insurance terminology?

In insurance terminology, the term used to describe the cause of loss is "peril." A peril refers to any situation or event that can cause damage to property or result in a financial loss. Common examples of perils include fire, theft, windstorms, and floods. Understanding the definition of perils is crucial for identifying risks and determining coverage in insurance policies.

While "hazard" might seem similar, it actually refers to conditions or situations that increase the likelihood of a peril occurring, rather than being a cause of loss itself. "Loss" refers to the actual financial impact or damage that occurs, while "exposure" pertains to the potential for loss or the risk itself—essentially, how much risk is present. Each of these terms plays a specific role in the context of insurance, but "peril" is the correct term for identifying the direct causes of loss.