Asked by Caroline Zoufaly on May 31, 2024
Verified
________ suggests people who are insulated from risk sometimes behave differently
A) Moral hazard
B) Negligence
C) Strict liability
D) Coverage insulation
E) Coverage protection
Moral Hazard
The possibility that individuals who are insulated from risk sometimes behave differently than they would if not insulated.
Risk Insulation
Strategies or practices employed to protect an entity from potential financial losses or liabilities.
- Understand the concept of moral hazard in insurance.
Verified Answer
CH
Carrie HaddixJun 06, 2024
Final Answer :
A
Explanation :
Moral hazard occurs when a person or entity has an incentive to take undue risks because they do not bear the full consequences of those risks, often due to some form of insurance or protection that insulates them from the negative outcomes.
Learning Objectives
- Understand the concept of moral hazard in insurance.