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
ThesaurusAntonymsRelated WordsSynonymsLegend:
Noun1.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"
References in periodicals archive ?
Europe's leading bank boss wants the Government and the courts to show no mercy to those who face eviction, claiming this would lead to a so-called moral hazard.
THE EUROPEAN Commission may have ruled that the controversial Estia scheme to assist strategic defaulters with the repayment of their loans was not a state subsidy and could therefore go ahead, but just last it week it described it as a moral hazard. This was the view of the ECB and it was also repeated in the IMF's review of the Cyprus economy.
As reinsurance grows, plan moral hazard for high-cost enrollees can increase.
Two distinct forms are adverse selection and moral hazard. The former predicts the positive relation between policyholders' risk and demand for insurance, and the latter concerns policyholders' behavior change due to the incentives provided in an insurance contract.
One of the core concepts of insurance is moral hazard: the possibility that a customer might change their behavior and take on more risky behavior, knowing they are insured.
They call it "peak pricing" but make no mistake, this is a co-pay, and it is absolutely designed to address moral hazard. There's a big psychological impact when I have to lay out even a few dollars compared to free.
Section 3 takes up the issue of the unobservability of important aspects of the basic moral hazard model (called a pure moral hazard model from now on) and shows how theory-based estimation can be used to obtain measures of these important concepts.
The measure comes as more foreigners and overseas Koreans visit here temporarily to receive expensive medical services at lower prices thanks to the public insurance, and return home after in a case of what the government calls a "moral hazard."
West Wales area point-topoint secretary Beverley Thomas, of Puntingbud Farm, Haverfordwest, who has saddled many winners in her time, has only one horse in training these days - Moral Hazard, which she owns in partnership with west Wales' Adrian Simpson.
Moral Hazard: Conditions that increases the likelihood that a person will intentionally cause of exaggerate a loss.
However, while insurers are happy to sell policies of a higher premium, they're even more inclined to insure cars with lower values in order to avoid moral hazard."
Dogmatic ECB 'hawks' are more concerned about the moral hazard involved in purchases of government debt than about the moral hazard involved in negative rates.