What is moral hazard, Why does someone's willingness to pay

What is moral hazard

Reference no: EM131442980

Question: In terms of moral hazard:

a. Why does someone's willingness to pay a large deductible on an insurance policy tell an insurer something valuable about the seriousness of the moral hazard problem they might expect from the policyholder?

b. Why does car insurance which explicitly excludes insuring the car for commercial use act to reduce moral hazard?

c. Why does vehicle insurance based in part on miles driven reduce moral hazard problems?

d. Why would a GPS monitor that can record the location and the speed a rental car is driven help reduce the moral hazard problem that rental companies are exposed to?

Reference no: EM131442980

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