This discussion introduces moral hazard. This is where people may engage in riskier behavior because of insurance and the small losses one would expect from a risky behavior going wrong.

Describe an example of a moral hazard that we may run into in the real world. Think of something that is legal and not inherently lethal, yet still demonstrates elevated risk for the participant who would likely act safer if insurance or protection was not available. Explain why someone might take this risky action. What are the benefits to the risky behavior? In your response to two of your peers, explain what an insurance company may do to reduce the likelihood that an individual would take this risk. Keep in mind, that we cannot always just deny coverage if an individual is participating in the risky behavior. -Please present an idea you have with these guidelines.