In Order to Reduce the Undesirable Effects of Moral Hazard

question 26

Multiple Choice

In order to reduce the undesirable effects of moral hazard, an insurance company can

• A)introduce a deductible.
• B)classify clients into different types according to their history.
• C)reject the renewal of policies of those people with really bad records.
• D)all of the statements associated with this question are correct.

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Definitions:

Financial Support

Monetary assistance provided to meet the needs or goals of individuals, organizations, or specific initiatives.

Cultural Insensitivity

A lack of awareness or respect for the differences in cultures or beliefs, leading to behaviors that may be offensive to others.

Deficit Model

A perspective that focuses on what individuals lack in terms of skills, knowledge, or resources, rather than their strengths or potential.

Community Resource

A service, facility, or information that is available to members of a community, often aimed at improving quality of life.