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Which statement best explains Moral hazard?

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Question ID #26637 UPSC UPSC EPFO APFC 2026 Mock Test Series UPSC EPFO APFC 2026 Full-Length Mock Test 2 Medium

Which statement best explains Moral hazard?

Correct Answer: B. Change in behavior or risk arising because protection from loss exists
Moral hazard: Change in behavior or risk arising because protection from loss exists

Question: Which statement best explains Moral hazard?

A. Principle by which multiple insurers sharing the same risk contribute to an indemnity loss

B. Change in behavior or risk arising because protection from loss exists

C. Consideration paid for insurance coverage

D. Principle of restoring insured to approximately the financial position before loss, subject to policy terms

Correct Answer: B. Change in behavior or risk arising because protection from loss existsMoral hazard: Change in behavior or risk arising because protection from loss exists

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Which statement best explains Moral hazard? - MCQ Explanation

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Correct answer: B. Change in behavior or risk arising because protection from loss exists