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A person who does not lock doors or does not repair leaks shows an indifferent attitude this person represents what hazard?

User Nyakiba
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Final answer:

A person not locking doors or repairing leaks due to being insured exemplifies a moral hazard, where insurance coverage leads to riskier behavior because the insured party does not bear the full cost of their actions.

Step-by-step explanation:

The person described in the question is demonstrating behavior indicative of a moral hazard problem. Moral hazard occurs when an individual or a business takes on more risk because they have insurance and therefore do not bear the full cost of their actions. For instance, if a person is insured, they might not be as vigilant in locking doors or repairing leaks, because they know any losses incurred may be covered by their insurance policy.

Similarly, a business with insurance might not invest as heavily in preventative measures like security systems or fire sprinkler systems, relying on insurance to mitigate the financial loss from theft or fire, as opposed to a non-insured entity that would likely take extensive precautionary steps to avoid such perils.

User Niko
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