Question

an insured modifies his insurance claims, illegally adjusting them to display a lower amount. what insurance concept does this violate?

Answer 1

The insurance concept violated in this case is moral hazard.

Step-by-step explanation:

The insurance concept violated in this case is moral hazard. Moral hazard refers to the situation when people engage in riskier behavior with insurance than they would without it. By modifying his insurance claims illegally to display a lower amount, the insured is attempting to receive more compensation than he is entitled to, which goes against the principle of moral hazard. Insurance companies try to reduce moral hazard by conducting investigations to prevent fraud and by monitoring the insured's behavior.