Which of the following is not a type of hazard in insurance?

In the context of insurance, hazards refer to conditions or situations that increase the likelihood of a loss occurring. They are categorized into different types, each representing a unique aspect of risk.

Morale hazard pertains to the insured's indifference to loss because they have insurance coverage, which may lead them to take greater risks or neglect safety measures. Physical hazard refers to tangible conditions related to the physical properties of the item insured, such as a worn-out roof that may be more prone to damage during a storm. Moral hazard involves intentional actions by the insured that could lead to a loss, such as committing fraud or staging a theft.

The term "compensatory hazard" does not exist within the recognized categories of hazards in insurance. It is not used or defined in industry practices, making it not a type of hazard. Each of the recognized hazards plays a significant role in assessing risk and determining coverage in insurance policies. Understanding these definitions helps in evaluating risks and informing underwriting decisions.