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In short, Moral hazard is a hazard dealing with the difference between right and wrong while a moral hazards is a hazard dealing with people's attitudes.

At length, in the world of insurance, conditions that increase the frequency and severity of a loss are considered hazards. For example, placing a magazine rack beside your fireplace is a hazard. It heightens the chance of a fire to your house.

There are four hazard categories according to the CPCU study of Risk Management and Insurance. They are Moral, Morale, Physical and Legal.

Examples -

Moral hazard - conditions resulting from a weakness of human character (when someone should know the difference between right and wrong), such as embezzlement.

Morale hazard - conditions resulting from a person's indifferent attitude toward a loss when a property of exposure is insured, such as failing to lock the doors or roll up the windows of your car or leaving valuables in plain sight in your car . . .especially during the holiday season.

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15y ago
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6mo ago

"Moral hazard" refers to the risk that someone may act recklessly because they are protected from the consequences of their actions, often due to insurance or guarantees. "Morale hazard" is a term used more in the context of employment, where employees may become less motivated or careful due to a lack of consequences for their actions. In essence, moral hazard relates to financial risks, while morale hazard pertains to work ethic and behavior.

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Q: What is the difference between morale hazard and moral hazard?
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