Which type of hazard includes moral hazard?

Moral hazard is a concept that falls under the category of behavioral hazards. This type of hazard refers to the risk that a party may engage in risky behavior or take undue risks because they do not bear the full consequences of their actions. For instance, if an individual has insurance, they might be less careful with their property because they know that the insurance will cover any losses, which exemplifies moral hazard.

Behavioral hazards encompass not only moral hazards but also other behaviors that might lead to increased risk in insurance scenarios. These can include careless behavior or decisions made by individuals that could result in a claim or loss, as they may feel insulated from the full impact of those actions. Therefore, identifying moral hazard as part of the broader category of behavioral hazards solidifies its classification as a risk factor that insurers consider when assessing policies and setting premiums.