What term is used to describe the cause of a loss in an insurance policy?

The term used to describe the cause of a loss in an insurance policy is "peril." In the context of insurance, a peril refers to any event or situation that can result in damage, loss, or injury, which then triggers the coverage provided by the insurance policy. Examples of perils include fire, theft, flood, or a collision.

Understanding this term is crucial because it helps policyholders recognize what specific risks their insurance covers and under what conditions they can file a claim. In contrast, while terms like claim, loss, and coverage are related to the insurance process, they do not specifically refer to the cause of loss. A claim is the request made by the insured to the insurer for payment, a loss is the actual damage or injury that occurs, and coverage refers to the protections provided under a policy. Therefore, identifying "peril" as the cause of loss is key to understanding how insurance operates.