Insurance 101 – Chapter 3 – Volume 11 – Types of Morale Hazard

Types of Morale Hazard

Indications of a Morale Hazard are varied and important for every underwriter and claims person to understand. The video will discuss some of those indications of a Morale Hazard.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

Legal Disclaimer

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

Insurance 101 – Chapter 3 – Volume 10 – The Morale Hazard

The Morale Hazard

The “morale hazard” is the increase in uncertainty brought about by the indifference of a policyholder. Because of this indifference the policyholder may neglect ordinary precautions to protect against loss. The result is an increase in the probability of loss or an increase in the severity of loss. In many cases the difference between “moral hazard” and “morale hazard” may be only one of degree. If the property owner takes steps to destroy his or her own property, it is a “moral hazard.” If the property owner fails to take steps that would help to protect against a loss, that is a “morale hazard.” The “morale hazard” is usually not considered as dangerous as the “moral hazard.”

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

Legal Disclaimer

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

Insurance 101 – Chapter 3 – Volume 9 – Misrepresentation or Concealment

Misrepresentation or Concealment

An insurance company is entitled to determine for itself what risks it will accept, and therefore to know all the facts relative to the applicant’s physical condition. It has the
unquestioned right to select those whom it will insure and to rely upon him who would be insured for such information as it desires as a basis for its determination to the end that
a wise discrimination may be exercised in selecting its risks.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

Legal Disclaimer

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

Insurance 101 – Chapter 3 – Volume 8 – Underwriting Against Moral Hazards

Underwriting Against Moral Hazards

Policy provisions can be used to control the risk of the moral hazard, without refusing the risk in its entirety. Built-in provisions of the policies like the “fraud and  misrepresentation” conditions work to deter losses by persons with a moral hazard. The standard fire policy, and most first party policies, provide that the entire policy is void if the applicant commits fraud in securing the insurance or if the insured willfully  misrepresents or conceals any material fact or circumstance concerning insurance. If the policy is a marine policy the insured is required to volunteer material information. With other types of insurance the onus is on the insurer to ask the right questions. Failure to ask can compel an insurer to stay on a risk it would never have taken if it knew the truth.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

Legal Disclaimer

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.