Violet has automobile insurance with full coverage and no deductible. As a result, Violet is a very careless driver. This is an example of:

Name: Violet has automobile insurance with full coverage and no deductible. As a result, Violet is a very careless driver. This is an example of:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is an example of moral hazard, where Violet's behavior becomes more careless because she knows she is fully covered by insurance, reducing her incentive to drive carefully.

Violet Has Automobile Insurance with Full Coverage and No Deductible