Moral hazard

{
  "id": "MLC-T-ENV-017792",
  "term": "Moral hazard",
  "field": "Environment",
  "definition": "1. Relates to an increased probability of a loss through moral lapse of the owner (e.g., an insured previously convicted of arson, \"Burn down the house to collect the insurance.\").\n\n2. Relates to an increased probability of a loss arising from an apathetic insured or an insured who is indifferent to loss because of the existence of insurance to cover the loss (e.g., \"Let it burn because it is insured\", failure to repair faulty wiring which is considered more expensive than insurance premiums to cover the risk).\n\n3. A circumstance in which insurance, lending practices, or subsidies designed to protect against a specified hazard induce people to take measures that increase the risk of that hazard.\n\n4. Circumstance in which insurance, lending practices, or subsidies designed to protect against a specified hazard induce people to take measures that increase the risk of that hazard.",
  "subject": "Land, waste and cleanup",
  "references": [
    "Environmental Insurance and Risk Management Tools Glossary",
    "Coastal Sensitivity to Sea-level Rise Glossary and Acronyms",
    "Coastal Sensitivity Glossary"
  ],
  "url": "https://mlchart.com/terminology/environment/moral-hazard/"
}