General Insurance PrinciplesQuestion 130 of 158
Leaving the garage door open all day because 'my homeowners policy will pay if anything is stolen' is an example of which type of hazard?
a.Physical hazard
b.Moral hazard
c.Speculative hazard
d.Morale (attitudinal) hazard
Explanation
Carelessness or indifference that arises precisely BECAUSE insurance is in place is a morale hazard, sometimes called attitudinal hazard. Moral hazard requires dishonesty; physical hazard requires a tangible condition; 'speculative hazard' is not a real category.
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Related questions on this topic
- Which of the following is a PURE risk and therefore potentially insurable?
- Which characteristic is NOT one of the elements of an ideally insurable risk (the DICE test)?
- An applicant for a homeowners policy admits she has filed four small jewelry-theft claims in the last three years, two of which were closed as suspicious. This is BEST described as which type of hazard?
- Because only the insurer makes a legally enforceable promise to perform under an insurance policy, the contract is classified as:
- Because the insured cannot negotiate the wording of a standard homeowners policy, ambiguous language in the policy will generally be interpreted:
- Under California Insurance Code §331, a MATERIAL concealment by the applicant entitles the insurer to rescind the policy:
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