One way of reducing the moral hazard problem in the automobile insurance market is for drivers to
A) carry high deductibles.
B) carry no deductibles.
C) all have good driving records.
D) never make any claims.

Question

Quizplus · Accepted Answer

Carrying high deductibles reduces moral hazard by making drivers more cautious, as they bear more financial responsibility in the event of an accident.

One Way of Reducing the Moral Hazard Problem in the Automobile