Life & Health · Chapter 2 · Perils, Losses & Hazards
Moral Hazard
Definition
Loss is more likely because of the insured's dishonest character — intentional, conscious wrongdoing or negative habits.
Example
A business owner disconnects the sprinkler system to save money; lying on an application; insurance fraud.
Exam tip
MORAL = intentional/dishonest. MORALE = careless/indifferent ("it's insured, who cares"). The exam LOVES this one-letter trap.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms