A good driver who becomes more reckless after obtaining automobile insurance is an example of moral hazard.

Name: A good driver who becomes more reckless after obtaining automobile insurance is an example of moral hazard.
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Question

Quizplus · Accepted Answer

Moral hazard occurs when one party takes more risks because they are protected from the consequences of those risks by another party. In this case, the driver becomes more reckless because they know that the insurance company will cover any damages or losses they incur.

A Good Driver Who Becomes More Reckless After Obtaining Automobile