General Insurance PrinciplesQuestion 165 of 215
A homeowner buys a comprehensive policy and immediately stops locking his front door because he reasons that any theft will be covered. This change in behavior is BEST described as:
a.A physical hazard
b.A moral hazard
c.A legal hazard
d.A morale (attitudinal) hazard
Explanation
A morale or attitudinal hazard is the careless behavior that grows because the insured knows coverage is in place. It differs from a moral hazard, which involves dishonesty or intent to file a fraudulent claim, and from a physical hazard, which is a tangible condition like a broken lock.
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