What is the term for a condition that increases the frequency or severity of loss due to careless behavior?

The term that describes a condition that increases the frequency or severity of loss due to careless behavior is "Morale Hazard." Morale hazards arise from an individual's attitude and behavior regarding risk. When someone exhibits a careless attitude towards safeguarding their property or managing risk, they indirectly increase the likelihood of a loss occurring. For example, a homeowner who leaves their doors unlocked or fails to maintain their property adequately may be less vigilant about preventing theft or damage, thus increasing the chance of a claim.

The other terms do not fit this definition. A material fact refers to information that could influence the decision-making process in insurance underwriting and risk assessment. A multi-peril policy is a type of insurance policy that covers multiple types of risks in a single contract, and the National Flood Insurance Program is a federal initiative designed to provide flood insurance to property owners, which does not relate to the behavior associated with increased risk.