An example of a moral hazard would be Andrew leaving the washer, dryer, and dishwasher running at home while he goes to class since he is fully insured and he will not be at risk if a fire occurs.

Question

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This is an example of moral hazard because Andrew is not taking necessary precautions to prevent a potential loss or damage since he is fully insured and does not face any personal financial consequences if a fire occurs.

An Example of a Moral Hazard Would Be Andrew Leaving