Nearly all policies of insurance exclude loss caused intentionally by the insured. This is necessary to meet which of the following requisites of an ideally insurable exposure?

Question

Quizplus · Accepted Answer

Excluding loss caused intentionally by the insured helps control the moral hazard, which is the risk that the insured will behave recklessly or fraudulently knowing that they are protected by insurance. This is an important requisite of an ideally insurable exposure. The other options do not directly relate to the need for excluding intentional loss.

Nearly All Policies of Insurance Exclude Loss Caused Intentionally by the Insured