Certified Financial Consultant (CFC) Practice Exam 2025 – The All-in-One Guide to Exam Success!

A person neglecting to secure their property exemplifies a morale hazard. Morale hazards are risks that arise due to an insured party's behavior and the careless attitude that can come with having insurance. In this scenario, when a person does not take necessary precautions to secure their property, it suggests a level of indifference or negligence toward potential losses. This apathy can lead to increased risk of theft or damage since they may rely on insurance coverage for recovery rather than taking preventive actions.

This contrasts with other types of hazards, such as physical hazards, which involve tangible dangers like structural issues or unsafe conditions, legal hazards, which deal with legal liabilities and compliance risks, and environmental hazards, which refer to external factors affecting the safety of a property or location. Thus, the behavior of neglecting property security resonates specifically with the characteristics associated with morale hazards.