Maradona (a famous football star) has insurance on his house and belongings inside the house. As a result, he never

Question

Question: Maradona (a famous football star) has insurance on his house and belongings inside the house. As a result, he never feels the need to lock the front door. Maradona’s action is called

Options:

1.  Adverse selection
2.  Moral hazard
3.  Morale hazard
4.  Fortuitous
5.  None of the above

Answer 1

2. Moral hazard

Maradona (a famous football star) has insurance on his house and belongings inside the house. As a result, he never feels the need to lock the front door. Maradona’s action is called Moral hazard.