A safe driver who drives faster as a result of purchased collision car insurance would be an example of the ___________ problem.

Question

Quizplus · Accepted Answer

The moral hazard problem occurs when an individual's behavior changes after they have purchased insurance, knowing that they are protected from financial losses. In this case, the safe driver may drive faster because they know they are protected in the event of a collision.

A Safe Driver Who Drives Faster as a Result of Purchased