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​Lindsey’s auto-insurance company issued her a policy that required the installation of a devise that monitors her driving habits. Lindsey is confused because she had never gotten into an accident before she bought the insurance. The insurance company is protecting itself against:

a.​Adverse selection

b.​Moral hazard

c.​Bad drivers

d.​None of the above

Respuesta :

maranathaoye

Answer:

b.​Moral hazard

The insurance company is taking precautions against moral hazard, therefore they want to monitor their driving habit

Explanation:

Moral hazard is the type of hazard that occurs when a party Intentional gets careless or exposes them selves to risk because someone else is liable to bear the risk of whatever comes out of their actions. It occurs when the parties involved does not have complete information about one another.