What term describes a careless attitude that could increase the chance of loss?

The correct term that describes a careless attitude that could increase the chance of loss is morale hazard. This concept refers to a situation where an individual's behavior, which may stem from a lack of concern for potential losses, can lead to higher risks.

For example, if a person has insurance coverage that makes them feel secure, they might not take adequate precautions to protect their property, believing that any loss would be covered by their policy. As a result, the negligence or recklessness in their attitude towards risk can inadvertently lead to an increased likelihood of loss occurring.

The other terms mentioned in the options have distinct meanings. A physical hazard relates to tangible conditions or objects that might increase the risk, such as having faulty wiring in a building. A moral hazard pertains to a change in a person’s behavior due to the existence of insurance, leading them to take risks they otherwise would not; this is more about the motivations behind one's actions rather than a carefree attitude. Fraud involves intentional deception for financial gain, which is different from careless behavior. Understanding these distinctions helps to clarify why morale hazard is the best fit for describing a careless attitude that could increase the chance of loss.