Question 15: An insured firm that is more open to risky behavior knowing that it is protected and that its insurance party will incur the cost is known as moral hazard. If a new homeowner does not get homeowner's insurance, they are engaging in risky behavior. Given this, they will ultimately be responsible for any future damages to the home such as a fire or flood. Say they are doing this because they want to save money because they enjoy spending their money on material things and don't want to give up the imagine they give off. in the end, if one of these foreseen events occur, they will Ios not only their lifestyle but ultimately their home as well. By not protecting their home in the right way they are taking a gamble and engaging in risky behavior as they are putting all their chickens in one basket. This is seen as a great moral hazard as the gamble is based on luck