Louisiana P&C Adjuster Practice Exam

Natalie's forgetfulness about replacing her squealing brakes is an example of which type of hazard?

1. Physical hazard

2. Morale hazard

3. Legal hazard

4. Environmental hazard

The correct answer is: Physical hazard

The correct answer highlights Natalie's forgetfulness regarding her car's squealing brakes as a physical hazard. In the context of risk assessment in insurance, physical hazards refer to tangible conditions that increase the likelihood of an accident or damage. Issues with vehicle maintenance, such as failing to replace brakes that are showing signs of wear, create a direct risk to safety. When brakes are not properly maintained, the risk of malfunction increases, potentially leading to accidents that could cause injury or damage to vehicles and property. The other options do not adequately capture the essence of the scenario. Morale hazards relate to carelessness or indifference that arises from a person’s belief that insurance will cover losses (for example, a person might drive recklessly because they have insurance). Legal hazards would involve risks due to legal actions, such as lawsuits or regulatory compliance issues. Environmental hazards pertain to conditions in the overall environment that could affect safety, like weather or location factors. Natalie's forgetfulness affects the condition of her vehicle directly, thus classifying it as a physical hazard.