What is the main purpose of assessing hazards by an underwriter?

The main purpose of assessing hazards by an underwriter is to ascertain the possibility of a peril occurring. This assessment involves evaluating various risk factors associated with an insurance application, including the likelihood of loss or damage that may arise from specific risks or hazards related to the property or person being insured. Understanding these risks helps the underwriter make informed decisions about whether to accept the insurance application and under what terms.

This process is critical in determining the level of risk the insurance company is willing to take on and ensures that appropriate premiums are set to cover potential claims. The focus is on predicting the frequency and severity of potential claims, which is why understanding perils is crucial for maintaining the financial stability of the insurer.