See the full video at https://rumble.com/vhxz37-a-video-about-what-is-a-moral-hazard.html?mref=6zof&mrefc=2 and at https: // youtu.be/BpVifhr1lXc  The moral danger is the increase in uncertainty caused by personal actions of individuals. These actions can contribute to the probability or severity of loss. The person who creates the problem can be the policyholder or another person. In both cases, the risk of loss increases. A moral hazard can be found in all insurance lines. No insurer can ignore this without incurring an increased risk of significant loss. The moral hazard is very difficult to detect and therefore very dangerous for the insurer.
"Moral risk" is the term used to denote the incentive that insurance can give an insured to increase the risky behavior that the insurance covers. [ May Dept Stores 305 F.3d 597, Erickson-Hall Constr. Co. v. Scottsdale Ins. Co. (SD Cal., 2019)]
The competent insurer and adjuster acknowledges that moral hazard describes a policyholder who knowingly causes loss by, for example:
- setting fire to his building or car;
- conspires with thieves to steal his cargo truck;
- makes false entries in his or her accounts to justify a claim for non-existent property; or
- reports a burglary that never took place in his or her home or business.
Some insurers only consider intentional fraud when using the term "moral hazard". If an applicant reveals such a fraudulent intent, no reasonable insurer would agree to insure him. It is up to the adjuster to detect this and warn the insurer against sustaining the risk in the future. However, most moral hazards are not of this intentional type. There are many cases where the policyholder's attitude has increased the risk without thinking of a deliberate act. The moral hazards described below can be controlled by an efficient and knowledgeable insurer. Catalog
© 2021 – Barry Zalma. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and email@example.com.
Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award.
For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims staff to become insurance claims staff.
Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Zalma on Twitter at https://twitter.com/bzalma ; Go to Barry Zalma videos on Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the library for insurance claims – https://zalma.com/blog/insurance-claims-  bibliotek / Read posts from Barry Zalma at https://parler.com/profile / Hymn / post; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ podcast now available at https://podcasts.apple.com/us/podcast/zalma-on -insurance / id1509583809? uo = 4