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

Question

Quizplus · Accepted Answer

Moral hazard refers to the tendency of individuals to behave in a riskier manner when the costs of that behavior are not fully incurred by themselves. In this case, the driver feels protected by the insurance and may drive faster, knowing that any damages will be covered.

A Safe Driver Who Drives Faster as a Result of Purchasing