What does Morale Hazard mean? Read on to discover the definition & meaning of the term Morale Hazard - to help you better understand the language used in insurance policies.
A term used to describe a subjective hazard that tends to increase the probable frequency or severity of loss due to an insured peril. Morale hazard, as contrasted with moral hazard, does not imply a propensity to cause a loss but implies a certain indifference to loss simply because of the existence of insurance. For example, an insured's attitude may be indifferent if a loss occurs because they have insurance.
We hope the you have a better understanding of the meaning of Morale Hazard.