Which of the following is an example of a moral hazard?

The choice of filing a false insurance claim clearly illustrates a moral hazard, which refers to a situation where a party may take risks or act with less caution because they do not bear the full consequences of their actions. In the case of submitting a fraudulent claim, the individual is exploiting the insurance system, knowing that they are unlikely to face significant repercussions for their dishonesty. This behavior is predicated on the assurance that they are covered, which emboldens them to act unethically.

Moral hazard is characterized by changes in behavior when individuals are insulated from risk, often due to insurance. When someone files a false claim, they demonstrate a willingness to take advantage of the coverage without facing the direct consequences if the insurance company discovers the deceit. This undermines the principles of insurance, which rely on mutual trust and the understanding that policyholders act in good faith.

The other scenarios presented do involve elements of risk or carelessness but do not fit the precise definition of moral hazard as clearly as the act of filing a false claim. Those actions may show negligence or poor decision-making, but they do not necessarily exploit the system in the same deceptive manner as a fraudulent insurance claim does.