Static Risk

Definition: Risk associated with hazards that can occur without a broader change in the economy, such as fire, theft, or accidental damage. Such risks are often addressed through insurance and loss prevention.

Example

An owner evaluates fire exposure and buys a policy that covers specified fire losses subject to its terms.

Keep the distinction clear

Static does not mean every loss is insured. Exclusions, deductibles, limits, and the actual cause of loss determine coverage.

Related terms

Dynamic Risk · Risk · Hazard Insurance

Keep studying

Income Approach: NOI, Cap Rate, Property Value, and Cash-on-Cash Return

References: FREC Course II syllabus: investment concepts

Pronunciation (US): STAT-ik RISK (capitals show stress)

Pronunciation reference: Merriam-Webster