Moral Hazard in Auto Insurance Might Refer To

question 1

Multiple Choice

Moral hazard in auto insurance might refer to:

• A)an auto owner failing to maintain the car, increasing the likelihood of an accident.
• B)an applicant withholding information from the insurance company about the likelihood of having an accident.
• C)an applicant lying on their application form about their health history.
• D)an applicant having more cars than they announce when they complete their application.

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Definitions:

Current Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its short-term assets.

Liabilities

Financial obligations or debts that a company owes to others.

Debt

Money owed by one party to another under the condition of repayment, often including interest charges.

Profitability

The capability of a business to generate earnings greater than its expenses over a specific period, resulting in a profit.