Final answer:
Insurance companies can prevent the unintentional lapse of policy due to nonpayment of the premium by monitoring behaviors, offering incentives, and conducting investigations to prevent fraud.
Step-by-step explanation:
Insurance companies can prevent the unintentional lapse of policy due to nonpayment of the premium by implementing certain measures. One way is to monitor certain behaviors and offer incentives to policyholders to reduce the risk of nonpayment. For example, they might offer lower rates on property insurance to businesses that install top-level security and fire sprinkler systems and have them inspected annually. Another measure is to conduct investigations to prevent insurance fraud, which helps reduce extreme cases of moral hazard.