moral hazard
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Related to moral hazard: Adverse selection
moral hazard
n.
1. The risk to an insurance company that the holder of a policy will destroy the insured property in order to collect the monetary reimbursement available under the policy.
2. The risk that an individual or organization will behave recklessly or immorally when protected from the consequences.
moral hazard
n
(Insurance) insurance a risk incurred by an insurance company with respect to the possible lack of honesty or prudence among policyholders
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Noun | 1. | moral hazard - (economics) the lack of any incentive to guard against a risk when you are protected against it (as by insurance); "insurance companies are exposed to a moral hazard if the insured party is not honest" economic science, economics, political economy - the branch of social science that deals with the production and distribution and consumption of goods and services and their management endangerment, hazard, jeopardy, peril, risk - a source of danger; a possibility of incurring loss or misfortune; "drinking alcohol is a health hazard" |