What is referred to as the actual cause of loss?

The term that refers to the actual cause of loss is "peril." In the context of insurance and adjusting claims, a peril is defined as an event or circumstance that causes damage or loss to property. Common perils include fire, flood, theft, and collision. Understanding perils is fundamental for adjusters as it allows them to determine whether a loss event qualifies for coverage under a policy.

When assessing claims, identifying the specific peril that resulted in loss helps clarify whether the insurance policy covers that situation. For instance, if a policy covers fire damage but not flood damage, and a building was lost to a flood, the adjuster needs to recognize that the flood is the peril that caused the loss and that coverage may not apply.

Other options, while relevant in the broader context of risk and loss, do not directly define the cause of loss. Exposure relates to the extent or level of risk associated with a property or entity but does not specify a cause. Moral hazard refers to the risk that a person may change their behavior when they know they are insured, but again, this does not pinpoint a specific cause of a loss event. Negligence involves a failure to act with reasonable care, which can lead to damage or loss, but it is