Which term describes something that increases risk in insurance?

The term that describes something that increases risk in insurance is a hazard. In the context of insurance, a hazard refers to any condition or situation that increases the likelihood of a loss occurring. This could include physical hazards, such as a poorly maintained building that is more susceptible to fire, as well as moral hazards, which arise from a person's behavior affecting the likelihood of a loss—like someone becoming reckless because they have insurance coverage.

Understanding hazards is crucial in the insurance industry, as they directly influence underwriting decisions, premium calculations, and risk assessments. Insurers must evaluate various hazards when underwriting policies to determine the level of risk associated with insuring a particular individual or property. By identifying and managing hazards, insurers can mitigate potential losses and adjust premiums to reflect the risk more accurately.

The other terms listed serve different purposes in the insurance realm. Consideration refers to something of value exchanged between parties in an insurance contract, indemnity relates to compensating for losses incurred, and waiver involves relinquishing a right or privilege, which does not pertain to the concept of risk increase.