One strategy insurance companies have adopted to reduce moral hazard is to require an injured party to pay a _______________ .

Question

Quizplus · Accepted Answer

Insurance companies often require an injured party to pay a deductible as a strategy to reduce moral hazard. This means the insured must cover a portion of the loss themselves before the insurance coverage kicks in, encouraging them to act more cautiously since they bear some of the financial risk.

One Strategy Insurance Companies Have Adopted to Reduce Moral Hazard